VIENNA/FRANKFURT (Reuters) - Deutsche Wohnen (DWNG.DE), Germany’s second-largest real estate group, plans to acquire Austrian peer Conwert CONW.VI in a deal that values the company at about 1 billion euros ($1.1 billion), it said on Sunday.
The planned acquisition is the latest in a string of deals in Germany’s fragmented real estate sector, including Deutsche Annington’s ANNGn.DE 3.9 billion euro takeover of Gagfah GFJG.DE in December and Deutsche Wohnen’s 1.7 billion bid for GSW in 2013.
Deutsche Wohnen plans to offer 11.50 euros per Conwert share, a premium of about 21.5 percent over the volume weighted average price over the past six months and a 4.8 percent premium to Friday’s closing price.
Two of Conwert’s largest shareholders, Haselsteiner Familien-Privatstiftung as well as Karl Ehlerding and family, have committed to tender a combined stake of about 25 percent of directly and indirectly held Conwert shares.
“We want to collect as many shares as possible,” Deutsche Wohnen Chief Financial Officer Andreas Segal told Reuters.
The offer, with a minimum acceptance threshold of 50 percent plus one 1 share, will be published in mid-March and also extend to convertible bonds issued by Conwert, Deutsche Wohnen said.
Following the transaction’s completion, Deutsche Wohnen plans to undertake a review of Conwert’s property portfolio, which may lead to a sale of non-core holdings over the short to medium term, it said.
The deal will be financed through free liquidity and a 900 million euros bridge facility provided by the advising banks, Deutsche Wohnen said, adding the latter was meant to be fully refinanced by a capital increase in the course of the year.
The group also said it intended to make a mandatory offer for shares in office property manager ECO Business-Immobilien AG EBIV.VI, in which Conwert owns about 95.8 percent, adding it would pay 6.35 euros per share not already owned by Conwert.
ECO shares closed at 5.18 euros apiece on Friday, giving it a market value of about 177 million euros.
After months of upheaval, during which Conwert took a hit from expensive interest rate swaps and appointed a new chief executive, the company is focusing on its German and Austrian residential properties, shedding Eastern European assets and cutting costs.
($1 = 0.8761 euros)
Writing by Christoph Steitz; Editing by Kevin Liffey, Susan Thomas and Frances Kerry