Israeli property company Gazit-Globe and US investor Citi Property Investors are to take control of Vienna-listed property company Meinl European Land.

The pair are proposing a €500m (£389m) purchase of convertible securities and will also underwrite a €300m (£233m) rights issue to the existing shareholders of Meinl, which saw its market value adversely effected after it was investigated by the Austrian financial authorities about its share buy back programme last year,

The agreement, announced today, comes six months after the Meinl board of directors appointed Merrill Lynch to conduct a review into either a companywide restructure or a complete sale. The deal sees the partners assuming control of Meinl’s governance and management structure.

Meinl was believed to have been courted by investors such as US investment company Apollo Real Estate Advisors, investment banks HSBC and Goldman Sachs and German developer ECE Projektmanagement.

Georg Kucian, chairman of Meinl said: ‘The proposed transaction represents a very positive outcome for certificate holders. The introduction of new capital will enable MEL to accelerate its expansion in Eastern Europe, while the adoption of strong corporate governance measures and management restructuring will help regenerate confidence in the Company.’

Chaim Katzman, chairman of Gazit-Globe, said: ‘We believe MEL has enormous potential to deliver investor value, which the Company has been unable to capitalise upon. It has a portfolio of 160 high quality assets diversified across 11 countries, offering considerable mid to long term growth potential, particularly in the rationalisation, value maximisation and completion of the Company’s development pipeline.’

The company has a market capitalisation of €2.85bn (£2.1bn) and a central and Eastern European property portfolio worth €1.8bn (£1.3bn).