FRANKFURT (Reuters) - German property groups LEG Immobilien LEGn.DE and TAG Immobilien TEGG.DE have terminated their merger discussions over disagreement on valuation, LEG said in a statement late on Tuesday.
“No agreement could be reached particularly with regard to a possible exchange ratio. Against this backdrop, the two companies will not pursue the intended combination further,” LEG said.
The German property market has boomed in recent years, prompting several companies to seek mergers as well as stock market listings to benefit from rising house and commercial real estate prices.
LEG has a market capitalisation of 7.4 billion euros ($8.1 billion), while TAG's equity is worth 3 billion euros. Both companies are listed in Germany's mid-cap index MDAX .MDAXI.
LEG said last week that it would offer TAG shareholders to exchange their shares for LEG stock in a potential deal, adding at the time that it was uncertain whether an agreement would be reached.
Shareholders of both companies did not fully support the deal, differing on valuations for their stock, one source close to the matter said.
LEG Immobilien is mainly active in Germany’s industrial heartland North Rhine-Westphalia and owns around 136,000 apartments, while TAG Immobilien has about 85,000 flats mainly in Northern and Eastern Germany.
($1 = 0.9107 euros)
Reporting by Arno Schuetze; Editing by Lisa Shumaker
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