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Dubai Sets Foot In Bulgaria

Investment Corporation of Dubai offered 3 billion euro for Inmobiliaria Colonial, the Spanish developer that owns of Riofisa, which is developing two projects in Bulgaria worth more than 450 million euro, Bloomberg reported on February 28.

Investment Corporation of Dubai bid 1.85 euro for each share of Colonial, which lost half its market value in six the past months, on February 27. The offer is 8.8 per cent higher than the closing price of the previous day.

Investment Corporation, which now has more than 55 billion euro of assets, would get 12 billion euro of assets including offices and malls in Madrid and Paris.

Colonial also owns a 15 percent stake in Fomento de Construcciones y Contratas, Spain's third-largest construction company, with a market value of 839 million euro, which will build Danube Bridge 2, linking Vidin and Bulgaria, and the adjacent infrastructure. The two projects are estimated at 162 million euro.

Colonial is the owner of the retail developer Riofisa SA, which it acquired in 2007 for two billion euro. The latter has two large projects in Bulgaria – the mixed-use Civis centre near Sofia’s central railway station, only the first phase of which will cost more than 270 million euro, and a 175 million euro shopping centre in Plovdiv.

Investment Corporation is the third company to approach Colonial this year as a slump in the Spanish property market is gaining momentum. The other two were General Electric and the Paris-based developer company Gecina SA.

"The offer is subject to a large number of conditions, which casts a doubt over whether it will actually go ahead," said Juan Jose Figares, chief analyst at Link Securities in Madrid, quoted by Bloomberg.