Investor calls for resignation of chair of Germany's Aareal Bank

FRANKFURT, Feb 10 (Reuters) - Activist investor Teleios, which holds a 6% stake in Germany's Aareal Bank (ARLG.DE), on Thursday called for the resignation of the lender's chairman ina letteraddressed to the supervisory board.

Aareal, which is reeling from a $2.1 billion buyout attempt that failed last week, responded that the issues raised in the letter were "without merit".

Teleios is one of the big investors that cheered the bid's demise because it said the deal had undervalued the company.

The letter, signed by Adam Epstein of Teleios, is the first detailed reaction from the investor, which has long called for changes at the German real-estate lender.

Management and the supervisory board had backed the offer from the buyout group, which included U.S.-based Advent International and Centerbridge Partners.

The Teleios letter said that the protagonists of the buyout deal, including chair Hermann Wagner, should "acknowledge their misjudgement and resign now".

Teleios is the second big investor to call for Wagner's resignation after Petrus Advisers did so last week.

In its response to the letter, Aareal said that some minority shareholders seem to want to break up the bank.

"A liquidation of the company with the sale of the individual components is not a sustainable strategy," it said.

Reporting by Tom Sims and Frank Siebelt; Editing by Riham Alkousaa, Maria Sheahan, Alexandra Hudson

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