Here is Cityconâs quarterly update + a brief comment on the sale of three Finnish shopping centers. What do you think? Naturally, the hot topic is G Cityâs attempt to buy the entire company at a bargain price, which has progressed frighteningly fast.
This earnings season, Iâve made short commentary videos on all the companies I own (except Vodafone, which I havenât gotten around to yet). You can find them on the channel, and tomorrow itâs Eezyâs turn. On Friday, itâs Anora and KH Group. Earlier today, it was the turn of Alma Media, which I own through Ilkka. That can also be found on the channel.
It appears that, for instance, Salla SuonperÀ, the Country Director for Citycon in Finland, sits on the board of the potential buyer, Noga Finland Retail Properties Oy.
Quite a situation indeed. G City / its affiliates are simultaneously buying Citycon shares at âŹ2.90, which corresponds to approximately 44% of the EPRA NTA of âŹ6.57 (as of June 30, 2026), and are (possibly) buying properties from Citycon at the latest estimated fair value. Safeguarding the interests of the shareholders is an independent board that has blessed both of the aforementioned actions.
I would also say that since Citycon itself highlights EPRA NRV more generally, it would perhaps be more relevant in this case. Citycon also has quite a few development projects underway, so when valuing what the correct book value would be, wouldnât 7.64⏠be what theyâre aiming for in arbitration?
Itâs just weird that they would start selling at 2.90, when the company is improving its earnings all the time and selling 3 assets for a price that corresponds to 79% of the entire firmâs current market capitalization. They have also been gradually redeeming hybrids, so thereâs definitely a strange twist going on. The hidden value will pop up the moment the Cat Man (Kissamies) says the word.
@Alex_af_Heurlin1 has written a loooong piece about Citycon and how Katzman has taken over the company. I havenât really been following Citycon, so I donât know whatâs new, but here are a few quite interesting points from the article.
Interesting article, I recommend reading it!
Sources say that Citycon has kept the book values of its properties unrealistically high. By keeping the properties valuable on paper, the companyâs debt burden has appeared more reasonable.
When external consultants determining property values suggested write-downs, they were replaced. Some other real estate companies have also resorted to this in recent years, but at Citycon, the practice was taken to the extreme.
Even from the new consultants came underwhelming valuations for the properties, at which point Citycon began determining the value of its properties itself.
âWe in Finland perhaps have a different view of the truth than elsewhere in the world,â says one insider.
Iâm currently sitting on a pile [of shares] and I welcome the media attention on this topic. It seems people are indeed interested in Citycon, as the videos covering it are racking up a decent number of views.
I am now pushing for the requirement that in a compulsory redemption situation, the arbitration court must have enough integrity to demand a fair price from Chaim Katzman for Cityconâs minority shareholders.
The offer price of 2.90 euros is legalized robbery, given that the companyâs book value is several times higher (9.53 euros). The EPRA NRV calculated by the company itself is 7.64 euros per share in the latest interim report, which would be a fair price. I donât necessarily believe that will go through as is, but in my opinion, it is the starting point from which we should begin the discussion.
I have a dog in this fight, but perhaps itâs worth trying to get the cow moving sometimes so you can put meat on the table.
I have mentioned this before, but if Katzman himself values his assets, then he should be allowed to value the repayment based on that as well.
Two out of the three hybrids can already be paid off in full, and it seems like itâs possible to make buyback offers for the third one from time to time. If those two hybrids are cleared out, the earnings will improve quite significantly.
Has anyone analyzed G Cityâs balance sheet, by the way, to see if there might be a hybrid pushing this 7% coupon hiding in there? It feels like they really want to milk Citycon for everything they can, even by force.
That Hesar (Helsingin Sanomat) article made me reminisce about my own decision to sell years ago.
Back in the day (2015), I sold my Citycon shares because it started to annoy me that the company was dipping into shareholdersâ pockets every year to arrange share issues, even while paying out dividendsâon which the retail investor paid taxes, but the major shareholder did not. In other words, only the taxman (and the major shareholder) came out ahead in this arrangement. Even back then, it looked like Citycon was becoming Katzmanâs personal piggy bank. Itâs a shame that it turned out this way; this would be a quite good company to have in a portfolio if managed properly.
Exactly, so âKissamiesâ (Catman) has engaged in such tricks before. I hopped on the bandwagon in the spring of 2017, and apparently, I havenât looked further back than the 2016 financial statements.
In the early years, Citycon was quite a good cash flow machine; it didnât bother me too much even when the stock price fluctuated, because the yield on invested capital was around 7-8%. The debt situation was also very good, even though the markets feared it after every ECB/FED meeting.
The downward spiral began after Covid when the main shareholder couldnât milk it anymore since the cash flows were uncertain.
I agree that, if managed properly, this would have been a really good stock. Even though I invested in it for the cash flows myself, I would have appreciated it if they had kept the money in the coffers a couple of times over the years; that way, we would have avoided all sorts of expensive green bonds and other bizarre payday loans.
I think one good piece of evidence of the manipulation is that they vomit out money in dividends at the same time as they carry out a directed share issue to the main shareholderâŠ
The âkiss-guyâ (takeover bidder) seems to be scooping up more shares all the time at âŹ2.90. I suppose the required 90% threshold will be met. This is a brazen daylight robbery, but Iâm still glad I sold mine back on Feb 12, '26, slightly above the tender offer price. With that money, I bought Constellation Software, which has gone up about 38%.
It feels like they really want to milk Citycon for everything they can, even by force.