April 18, 2018 / 2:10 PM / a month ago

UPDATE 1-Immofinanz gets S Immo stake as Austrian property carousel twirls

(Adds fund manager quote, detail, updates share prices)

VIENNA, April 18 (Reuters) - Austrian property group Immofinanz is acquiring a 29.1 percent stake in peer S Immo, securing a large foothold in a second rival that could help it shape any mergers between Austria’s three top listed real estate companies.

Immofinanz already owns 26 percent of CA Immo and is reviewing its options for that stake after effectively abandoning plans to merge with that company.

It will now spend 390 million euros ($483 million) — or 20 euros per S Immo share, well above Tuesday’s closing price of 16.12 euros — to buy around 14.6 million shares from investor Ronny Pecik’s RPR Group and 4.9 million shares from Rene Benko’s Signa group, it said on Wednesday.

“At first glance it looks as though (Immofinanz Chief Executive) Oliver Schumy has secured his position,” one fund manager said on condition of anonymity, referring to speculation about consolidation among the sector’s top players.

The deal came the same day that U.S. property investment firm Starwood Capital Group launched a bid for minority stakes in CA Immo and Immofinanz as it seeks exposure to markets in central and eastern Europe.

Immofinanz said it would fund the S Immo deal with available liquidity and, if necessary, additional bank financing. The transaction was expected to close “in several months”.

“The real estate portfolio of S Immo complements the Immofinanz portfolio in the office and retail areas. The transaction is therefore expected to strengthen the market position of both companies and create synergies for the management of the properties,” it said.

“In the event of a future combination of the two companies, the increased size would lead to a stronger position on the capital market. Opportunities for the realisation of substantial synergies in financing and overhead costs would also be possible.”

In Austria stakes above 30 percent trigger a mandatory takeover offer to other shareholders.

S Immo shares extended their gains on Wednesday afternoon after the deal was announced. By 1354 GMT they were up 4.3 percent at 16.82 euros. Immofinanz shares were down 2.8 percent at 2.128 euros.

Immofinanz said the situation with its stake in CA Immo was unchanged while it evaluates strategic options. ($1 = 0.8075 euros) (Reporting by Alexandra Schwarz-Goerlich and Michael Shields, editing by Francois Murphy)

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