Status: 23.08.2021 1:35 p.m.
The real estate group Vonovia is starting the third attempt at the planned takeover of competitor Deutsche Wohnen. Vonovia boss Rolf Buch emphasized that the slightly improved offer was the last.
Germany’s largest real estate group Vonovia is beginning what is likely to be the final attempt to take over the smaller competitor Deutsche Wohnen. As of today, the shareholders of Deutsche Wohnen can accept the offer of 53 euros per title via their custodian bank and tender their shares, the DAX group announced. This would mean that Deutsche Wohnen would be worth a total of 19 billion euros. The offer period is expected to end on September 20 at midnight.
BaFin gave the go-ahead
Vonovia just failed to reach the minimum acceptance threshold of 50 percent last month with an offer for number two on the German housing market in the amount of 52 euros per share, because many shareholders were apparently hoping for a better offer. The new offer also aims for a minimum acceptance rate of 50 percent.
The Federal Financial Supervisory Authority (BaFin) had previously exempted Vonovia from the one-year blocking period for a new offer, which is actually provided by law.
“The last offer”
Vonovia confirmed that there would be no further takeover offer: “We have made a binding, clear and irrevocable declaration that this will be the last offer,” said Vonovia boss Rolf Buch. The Bochum group already owns almost 30 percent of the Deutsche Wohnen shares.
Vonovia boss Rolf Buch emphasizes that it will be the last offer to the shareholders of Deutsche Wohnen.
Image: picture alliance / dpa
In the event that the offer fails again at the minimum acceptance threshold, it should stay that way: “We will not buy the 1,000 or so shares with which we cross the 30 percent threshold,” said Buch. Above this threshold Vonovia would have to submit a mandatory offer to Deutsche Wohnen.
Book makes pressure
In order to get the investors to accept the offer, Buch announced that small investors in particular must be clear that there will be no more distributions from Deutsche Wohnen in the future: “Vonovia, as the majority shareholder of Deutsche Wohnen, will work to ensure that Deutsche Wohnen Living no longer pays dividends. ” Anyone who does not offer the share is sitting on paper that will not pay dividends for years.
Buch is convinced that the takeover will succeed this time, because Vonovia has secured options on 0.93 percent of the shares in the Berlin competitor. “These stocks can be used at the end of the process to push us above the 50 percent threshold,” said Buch.
“Anyone who wants the transaction – and I think the market wants it – should offer as much as possible as quickly as possible so that we can reach 50 percent,” he appealed to investors.
In the interest of the population?
On the occasion of the presentation of the quarterly figures on August 6, the CEO estimated that hedge funds and short-term investors hold almost 50 percent of the shares in Deutsche Wohnen. Another 20 percent are owned by index funds.
Deutsche Wohnen now has mainly short-term oriented shareholders, Buch had said at the time. Such a shareholder structure is not compatible with the housing industry. “Housing companies are not suitable for short-term speculation”. Therefore, a success of the new Vonovia takeover offer is “also in the interest of the entire German population”.
More able to defend against state interference?
Critics, on the other hand, fear that the merger could result in excessive market power in the German housing market. The two major landlords listed in the leading DAX index together own 550,000 apartments valued at more than 80 billion euros, most of them in Germany.
However, the Federal Cartel Office had cleared the planned merger of the real estate groups. “The joint market shares of the companies do not justify any prohibition under competition law,” said the President of the Cartel Office, Andreas Mundt.
Anyway, industry experts suspect that the merger will be sought for political reasons. The more companies join forces, the more robust they can be against rent regulations and other market interventions by the state, says Michael Voigtländer, real estate market expert at the employer-oriented Institute of the German Economy in Cologne (IW).
It is not certain whether the market will want the transaction, as Buch claims. The current price of the Deutsche Wohnen share is around EUR 52.6, so that investors who accepted the offer today would only receive a small premium. Vonovia’s stocks are at the end of the DAX with a minus of more than one percent.