Fortress exits German property firm Gagfah in $1 billion sale
FRANKFURT (Reuters) - U.S. private equity firm Fortress Investment Group LLC ended its 10-year foray into German real estate on Tuesday, selling a $1 billion stake in Gagfah, one of Germany's largest property firms.
That was the fourth Gagfah share sale by Fortress in the last year, after it spent an initial 3.5 billion euros ($4.8 billion) in 2004 to buy the real estate operations from the German pension system.
"This is the last logical step after a long engagement," said a Gagfah spokesman. "Gagfah is now standing on its own two feet with a clear strategy based on the housing economy."
Deutsche Bank, which sold the shares on behalf of Fortress to a wide range of investors, said they were priced at 12.34 euros apiece, Gagfah's highest level at the time since early 2008. That valued Fortress' stake of about 28 percent at 740 million euros ($1 billion).
Gagfah, or the "Gemeinnuetzige Aktien-Gesellschaft fuer Angestellten-Heimstaetten", is one of Germany's largest property companies with around 145,000 dwellings, competing with Deutsche Wohnen AG and LEG Immobilien.
Last month, the company raised its earnings outlook for this year and next, saying its strategic refocus on the housing market was bearing fruit.
Gagfah shares extended their gains by 4.7 percent to 12.67 euros after the sale news.
"It seems some investors are relieved that Fortress has gotten out of the company and there aren't any further big share sales to be expected immediately," said one trader.
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