Icade and Morgan Stanley Real Estate Fund V have entered into a binding framework agreement for the acquisition by Icade of MSREF's 94.5% stake in Compagnie la Lucette, a Paris-listed real estate investment trust.

Following the completion of the transaction, MSREF will hold approximately 4.5% of Icade's share capital, making it Icade's second largest shareholder after Caisse des Dépôts et Consignations. The transaction will be carried out on the basis of the combined payment of two Icade shares and cash consideration of EUR 32.50 in exchange for 21 Compagnie la Lucette shares.

The deal, which was approved by the boards of directors of Icade and La Lucette at the end of December, was effected through the sale by MSREF of 35% of Compagnie la Lucette's share capital prior to December 31, 2009 with final completion of the deal set for the first quarter of 2010.

Compagnie la Lucette is a leading French office property company, with a portfolio valued at EUR 1.5 bn at end-June last year. The transaction represents 'a major step towards the expansion by Icade of its commercial property division' and will make it the second largest office property owner among the French SIIC companies, Icade said in a statement.

The deal comes shortly after Icade's sale of its entire residential portfolio in late November for over EUR 2 bn.

Icade was advised by UBS Investment Bank and Freshfields Bruckhaus Deringer. MSREF was advised by Morgan Stanley and Gide Loyrette Nouel and, for the tax aspects, by de Pardieu Brocas Mafféi.