Connect with us

Hi, what are you looking for?

Stock

Vonovia to make new Deutsche Wohnen offer at 53 eur/shr

Stock Markets5 minutes ago (Aug 01, 2021 05:05PM ET)

2/2
(C) Reuters. FILE PHOTO: An office building of the German property group Deutsche Wohnen is pictured in Berlin, Germany June 2, 2020. REUTERS/Fabrizio Bensch//File Photo

2/2

By Arno Schuetze and Matthias Inverardi

FRANKFURT (Reuters) -German real estate company Vonovia is launching a fresh attempt to buy rival Deutsche Wohnen (OTC:DTCWY) with a sweetened bid valuing the company at 19.1 billion euro ($22.7 billion), it said on Sunday.

Vonovia is planning to submit a new offer at 53 euros per Deutsche Wohnen share, subject to approval by German financial watchdog BaFin. Last month, Vonovia narrowly missed the 50% threshold with its agreed bid worth 52 euros a share.

The country’s biggest merger this year would create a European real estate giant with 550,000 apartments whose combined book value stands at more than 80 billion euros. It comes as Deutsche Wohnen has become the focus of popular anger in Berlin over tenant rights and affordable housing.

Since the failure of its offer last month, Vonovia has secured just below 30% of the shares in its rival, some of them by buying treasury shares at 52 euros apiece. It now needs a Bafin waiver – which is seen as a formality – to immediately file a new offer and not wait for a year with a new bid.

Vonovia is keeping key terms of the transaction unchanged, including the minimum acceptance threshold of 50%.

But according to the new offer Vonovia will not strike a domination agreement with Deutsche Wohnen for three years, giving hedge funds an incentive to tender their shares quickly.

“With that, we kill the speculative element”, Vonovia Chief Executive Rolf Buch told Reuters, adding Vonovia introduced an additional clause that provides shareholders get their money sooner if they tender their shares quickly.

The offer announced in May failed as some shareholders declined to tender their shares on a view it undervalued Deutsche Wohnen.

Separately, a number of hedge funds tendered none or only a small amount of their holdings in anticipation of getting more for their shares at a later stage.

Under German law, any acquirer can strike a so-called domination agreement once it crosses a 75% share ownership threshold, allowing it control of the target company’s cashflows. The acquirer must, however, in that case offer compensation to holdouts that is typically above the original offer price.

“We have taken the speculative elements out of the deal structure”, Buch said, referring to the fact that no such domination agreement is planned for three years.

An initial attempt in 2016 by Vonovia to buy Deutsche Wohnen failed on resistance by the target, but this time Deutsche Wohnen’s CEO favours the deal, which Deutsche Wohnen reiterated was still the case on Sunday.

The merger plans of Germany’s two biggest listed landlords are controversial in Germany because of tensions over soaring rents ahead of general elections in September. Executives have promised the merged company would work with politicians to provide affordable housing.

“We stand by our commitments as a reliable political partner to use our combined strength to tackle the challenges of the housing market”, Buch said.

($1 = 0.8428 euros)

Vonovia to make new Deutsche Wohnen offer at 53 eur/shr

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

Uncategorized

Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora incidunt.

Uncategorized

Nemo enim ipsam voluptatem quia voluptas sit aspernatur aut odit aut fugit, sed quia consequuntur magni dolores eos qui ratione.

Uncategorized

Quis autem vel eum iure reprehenderit qui in ea voluptate velit esse quam nihil molestiae consequatur, vel illum qui dolorem eum.

Uncategorized

Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora.

Disclaimer: Buzzclever.com it's managers and its employees (collectively "The Company") do not make any guarantee or warranty about what is advertised or above. Information provided by this website is for research purposes only and should not be considered as personalized financial or health advice. Copyright © 2021 Buzz Clever. All Rights Reserved