Germany's GSW sees some merit in Deutsche Wohnen tie-up

FRANKFURT Mon Aug 26, 2013 5:07am EDT

1 of 2. The logo of the GSW property firm is seen at its headquarters in Berlin, August 20, 2013. Deutsche Wohnen offered to buy rival property group GSW Immobilien for 1.75 billion euros ($2.3 billion) to expand in Berlin's booming real-estate market, as a tentative pick-up in Europe's economy attracts international investors.

Credit: Reuters/Thomas Peter

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FRANKFURT (Reuters) - German residential landlord GSW Immobilien (GIBG.DE) said a proposed $2.3 billion takeover by rival Deutsche Wohnen (DWNG.DE) could make sense and it will make a decision after full details are published.

Deutsche Wohnen made the all-share offer for GSW last week to expand in Berlin's booming rental market and tap nascent interest from international investors.

The bidder plans to publish full offer documents after its extraordinary shareholder meeting scheduled for September 30, which will vote in the issue of new shares to fund the takeover.

The tie-up would increase Deutsche Wohnen's portfolio of flats by around 63 percent to more than 147,000, pushing it into second place behind market leader Deutsche Annington (ANNGn.DE) with 179,000 apartments.

"A combination of GSW and Deutsche Wohnen could make sense from an operational and an industry point of view," GSW said on Monday.

GSW, which is scrambling to rebuild its leadership after a shareholder rebellion forced out the chairman and chief executive last month, said the all-share nature of the bid required a particularly detailed assessment.

Some analysts have said Deutsche Wohnen may struggle to win GSW investors' support for a non-cash offer.

"GSW will thoroughly analyze the bidder's strategy and intentions, which have not yet been made public but which will need to be set out in the bidder's offer document," GSW said.

Deutsche Wohnen and GSW traded 0.1 percent lower at 0732 GMT. GSW has added 5.2 percent since the offer was made public, while Deutsche Wohnen has fallen 5.3 percent.

GSW said it hired Goldman Sachs (GS.N), Citigroup (C.N) and Dutch bank Kempen & Co to advise on the offer.

The company appointed its remaining executive board members Joerg Schwagenscheidt and Andreas Segal as co-CEOs on Friday. ($1 = 0.7493 euros)

(Writing by Ludwig Burger; Editing by Erica Billingham)

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