Saturday, June 25

Merlin Properties leads the declines in the Ibex 35 due to the plan to relieve its CEO

The shares of MERLIN Properties are left more than 5% this Monday in the Ibex 35 and lead the declines of an Ibex 35 that shows notable falls of 1.50% and all the values ​​in red except for Rovi, which debuts today, and Red Electrical

The market punishes the division in the Spanish Socimi and the interference of the company’s main shareholder, Banco Santander, in the corporate governance of the company specializing in the rental of offices, commercial premises, shopping centers and logistics warehouses. The entity led by Ana Patricia Botín has 22% of the shares of Merlin Properties.

Analysts also consider that the confrontation between the management of Merlin Properties and its largest shareholder involves the departure of Banco Santander from the capital of the Socimi.

The non-executive chairman and representative of Santander on the board of directors, Javier García-Carranza, requested the removal of the founder and CEO of the group, Ismael Clemente, at the council held last week. However, Banco Santander’s proposal did not go ahead, since Santander only has three seats of the 13 that make up the council. Despite this, Ismael Clemente could voluntarily leave the company due to the continuous disputes with the non-executive president that would have limited his powers.

“News with a negative bias. If the departure of Ismael Clemente is confirmed, as well as part of the current management team, we consider that it would have a negative impact on the price,” they point out from Renta 4.

“Let us remember that the current CEO of Merlin is one of its founders (along with Miguel Ollero and David Brush), highlighting over the last 8 years a management that has led the Socimi to become in the largest real estate on the Iberian Peninsula“these experts comment.

“The participation of Banco Santander (22%) as well as its representation on the Board (3 directors out of 13 in total) would not be enough to firmly pressure the departure of the current management team. The SOCIMI Board of Directors has a majority of independent (7 directors), in addition to Clemente and Ollero as executives “, they recall from Renta 4.

“Whether or not the management team leaves, We believe that this type of news could increase the risk of paper output or the possibility of a placement or sale of all or part of Banco Santander’s participation “, they conclude.

For their part, from Banco Sabadell they comment that “the departure of Ismael Clemente, and his team, would be bad news because he enjoys the recognition of the sector, and the market, after doing an excellent job at the Socimi. That said, given that Santander it does not have enough weight in the Council, which is divided, it does not seem clear to us that Clemente will finally leave “. Sabadell advises buying the shares of Merlin Properties, with a valuation of 11.33 euros and a potential of 18.5%.

The consensus of analysts up to now has maintained confidence in the company by recommending to buy its shares and set its target price at 10.43 euros, which represents a potential upside of 15.76%. It has twelve buy recommendations, three to keep and only two to sell. This Monday Alantra Equities has raised its target price to 12.20 euros -potential of 27.6% – and has also raised its recommendation to buy. BNP Paribas Exane maintains the advice to maintain and places the target price at 10 euros -potential of 5% –


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