Investors are actually enthusiastic about such news: Big business beckons – and even more should jump out of it than was expected. This is exactly what the last badly shaken housing company Adler Group reported on Tuesday: A basic agreement had been concluded for the sale of a good 14,300 apartments, mainly located in eastern Germany, the price was more than a billion euros – and thus above the book value.
Actually. Because Adler owed one important piece of information in all of this: who the buyer is. One report from the Luxembourg-based company merely states that it is a “leading investment fund”, while another one mentions “one of the largest providers of alternative asset management”. According to Adler, it was the wish of the business partner not to become more specific. One would have preferred to name him himself, if only to avoid speculation in the first place. The buyer is a well-known name without any connection to the Adler Group.
Apparently that is no longer enough on the stock exchange. In any case, the enthusiasm was not far off there on Tuesday. After a brief price jump, the share immediately lost again and was quoted with losses of twelve euros by the afternoon. A year ago, the price was just under 30 euros.
The void seems to frighten many. The mistrust is apparently too deep, too much has happened at Adler in the past few weeks. After the price had almost halved between the middle of June and the end of September, Adler surprisingly announced at the beginning of October that it would consider the sale of a large part of its housing stock. Shortly thereafter, the notorious shortseller Fraser Perring released one of his reports – peppered with violent accusations: Among other things, he accuses the Adler management of inflating the balance sheet and secretly withdrawing money from the companies it has taken over. Always in the background, so the allegation, is the Austrian real estate entrepreneur Cevdet Caner, who does not appear in any official position at Adler, but pulls all the strings. As also became known, an anonymous whistleblower had already warned six major banks in March of impending problems with Caner and the Adler Group.
Eight billion euros in debt
Adler immediately rejected the allegations, and Caner also went on the offensive in a number of interviews and reported Perring to, among other things, market manipulation. Germany’s largest landlord Vonovia had used the crisis of its smaller rival from the S-Dax and secured an option to purchase 13.3 percent of Adler in return for a loan to Adler’s major shareholder Aggregate. Should Aggregate not be able to repay the money at all, Vonovia would even receive its entire block of shares of 26.6 percent.
Adler announced its first major sale two weeks ago: of the group’s 70,000 or so apartments, a good 15,000 are to go to rival LEG, valued at just under 1.5 billion euros. Together with the latest deal, Adler would have a total of 30,000 fewer apartments in its portfolio – and the bottom line was about one and a half billion.
The money is to help reduce the group’s debts of more than eight billion euros. In fact, the ratio of property values to debt on Adler’s balance sheet has recently been less favorable than that of other housing companies. With the latest deal, the so-called loan-to-value ratio would now drop to below 50 percent, it said. This also ends the announced sales. In the future, the business will concentrate on the seven largest German cities. However, no acquisitions are planned there for the time being, the company said. You will concentrate on your own new building projects.