Germany’s €18bn real estate merger falls apart as investors balk

Real Estate Sector Updates

The € 18 billion acquisition of German landowner Deutsche Wohnen by rival Vonovia collapsed after bidders slightly missed the required level of support from shareholders.

Late Friday afternoon Vonovia in late May to create a real estate Jaguar Note, where 47.62% of Deutsche Wohnen’s investors own 500,000 apartments in Germany and real estate in Sweden and Austria. Announced that it has accepted the full cash offer submitted.

The bid required the approval of at least 50 percent of the target shareholders. “This offer is dead under the hood,” Vonovia CEO Rolf Buch told the Financial Times. “Today is a sad day for all stakeholders,” he said, adding that the deal “reasons” and was approved by Deutsche Wohnen and the Berlin government.

It is the first time in five years that shareholders have rejected the merger of the two companies. Deutsche Wohnen’s investors declined a hostile bid by Vonovia in 2016.

This time, Vonovia offered € 52 per share of Deutsche Wohnen in cash and was approved by Target. This represents a premium of 22.6% of the landlord’s undisturbed share price.

The merged company was by far the largest landlord in the German capital, with rising rents and lack of available housing being one of the hottest political issues.

To gain political support for the deal, the two companies offered to sell 20,000 apartments to the local government of Berlin and build an additional 13,000 in the German capital.

Mr Buff said he still believes the deal will be beneficial. “We value our options thoroughly,” he said. Vonovia already owns an 18% stake in Deutsche Wohnen and is the single largest shareholder of its rivals. Buff said the options were to sell the stock, bid another, or buy additional stock.

A person familiar with the matter told FT that the transaction was derailed by a hedge fund. Hedge funds recently opened a large position in Deutsche Wohnen and later speculated on higher payments, so they did not bid on shares.

Deutsche Wohnen did not immediately respond to requests for comment.

Germany’s €18bn real estate merger falls apart as investors balk Source link Germany’s €18bn real estate merger falls apart as investors balk

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