IEF says will not bid for VastNed Retail, shares drop

AMSTERDAM (Reuters) - IEF Capital said it dropped its proposed bid for Dutch property group VastNed Retail, worth some 1.15 billion euros ($1.8 billion), blaming weak financial markets and pushing VastNed shares to a six month low.

IEF Capital, a joint venture between Rabobank's RABN.UL Bouwfonds Asset Management and Inflation Exchange Fund, said in a statement market conditions had weakened since the third quarter of last year when it started looking at buying VastNed.

IEF said last November it was willing to pay 70 euros per share or 1.15 billion euros for VastNed and the two companies decided last month to start exclusive negotiations after VastNed failed to sell the company in parts.

VastNed (VASN.AS: Quote, Profile, Research) shares were down 7 percent at 58.95 euros by 0747 GMT, the biggest decliners on the Amsterdam stock exchange, after hitting a six-month low of 56.21 euros.

"I do not expect a new party to maker an offer any time soon," says Theodoor Gilissen analyst Friso Berghuis. "Speculative investors are selling their shares."

VastNed Retail, which managed 2.2 billion euros in European retail property at the end of March, said in a statement it would focus on international growth.

IEF Capital, which owns about 3.5 billion euros in Dutch retail, office and industrial property, had wanted to buy VastNed Retail for its European portfolio to use as a hedge for inflation products sold to institutional investors.

(Reporting by Gilbert Kreijger; Editing by David Holmes)