(Adds quotes from spokesman, trader, background)
By Alexander Hübner
FRANKFURT, June 10 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.
($1 = 0.7345 Euros)
(Additional reportinb by Ludwig Burger; Writing by Thomas
Atkins; Editing by Victoria Bryan and Mark Potter)