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German property giants’ 19-bn-euro merger set to fail

Published : Sunday, 25 July, 2021 at 12:00 AM  Count : 220

FRANKFURT, July 24: Germany's top property group Vonovia said Friday that its 19-billion-euro takeover bid of Deutsche Wohnen would probably collapse because of insufficient interest from shareholders. Shortly before a Friday deadline, owners of just 47.62 percent of Deutsche Wohnen shares had agreed to the proposed deal, below the 50-percent threshold needed.
In a statement, Vonovia said it "will likely not reach the minimum acceptance level of its voluntary public takeover of Deutsche Wohnen.
"Vonovia continues to view the combination of the two companies as strategically compelling," it added.
The two companies combined would give birth to Europe's largest real estate group with more than 500,000 properties.
If the deal falls through, it would be the third time Vonovia has failed to acquire Deutsche Wohnen.
Vonovia's most recent offer in 2016 was rejected by shareholders who felt the price was too low.
This time, Vonovia has offered 52 euros ($61) in cash per Deutsche Wohnen share, plus a 1.03 euro dividend per share for the 2020 financial year.
In Germany, where a majority of residents are renters, Deutsche Wohnen and Vonovia play a premier role in the housing sector.
The companies promised in May that should the deal go ahead, they would limit rent increases until 2026 and build new apartments in Berlin, which has suffered for years from runaway rents and a lack of affordable housing.    -AFP

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