* Price includes 162 mln eur equity, 736 mln debt
* Transaction seen completing in Q2
* Immofinanz plans initial spin-off of 51 pct of Buwog
By Georgina Prodhan and Isla Binnie
VIENNA/MILAN, Feb 12 Austrian property group
Immofinanz said it had agreed to buy 18,000 German
homes for about 892 million euros ($1.21 billion), paving the
way for a spin-off of its Buwog unit.
Italy's Prelios, one of the two sellers along with
Deutsche Asset & Wealth Management, said on Wednesday
the price comprised 162 million euros in equity, 736 million
euros in debt, and working capital.
Prelios put the total enterprise value of the deal at 917
million euros and said it was subject to checks that may lead to
Immofinanz said it would propose the spin-off and listing of
Buwog to its shareholders at a meeting on March 14 after
securing the deal, which will gave it a critical mass of German
housing roughly equal to its Austrian housing stock.
The Austrian group wants to separate its residential assets,
held in the Buwog unit, from its commercial operations in
central and eastern Europe, making the value of each more
evident to shareholders.
Prelios, which is struggling to implement a 2012-2016
turnaround plan, said it expected to book a loss of 135-145
million euros from the sale of the portfolio.
The Italian property group also said its board had agreed to
start talks with the Fortress Group over possible integration of
their non-performing loans, and managing their real estate
Both parties said they expected the transaction to complete
in the second quarter. It includes Buwog's taking over Prelios
Deutschland's residential asset and property management
business, with about 300 staff and 30 million euros turnover.
Prelios owns 40 percent of Solaia, the joint venture that
holds the German property, and Deutsche Asset & Wealth
Management owns the remaining 60 percent.
Prelios said 524 million euros in bank loans to Solaia
coming to maturity in September would be cancelled at the
closing of the transaction, and 212 million euros of subsidised
loans would be transferred to Immofinanz with the portfolio.
Immofinanz said its shareholders would receive one Buwog
share for every 20 Immofinanz shares they owned, and the initial
free float would be 51 percent. The main listing will be in
Frankfurt with secondary listings in Vienna and Warsaw.
It said it would relinquish management control over the
Buwog group and expected to reduce its 49 percent financial
investment over time.
Before the well-flagged deal was announced, shares in
Prelios closed up 1.17 percent on the day in Milan at 0.60
euros. In Vienna, Immofinanz shares closed almost one percentage
point higher at 3.5 euros.
Immofinanz will hold a news conference in Vienna at 0900 GMT