The ad hoc announcement that the Vonovia housing group sent out shortly before the stock market closed at the end of last week was only a few lines long – but it was tough. Because Vonovia boss Rolf Buch had to admit that the planned billion-euro takeover of competitor Deutsche Wohnen surprisingly failed. The reason: Too few Deutsche Wohnen shareholders had accepted Vonovia’s takeover offer. 47.6 percent of the shareholders had agreed to the sale of their shares, but at least 50 percent should have done it.
Now the lamentation is great and the consequences are being discussed – for the two companies and for the German housing market, especially in the capital, because Deutsche Wohnen is Berlin’s largest private landlord, with around 114,000 apartments of its own. Berlin’s Senator for Finance Matthias Kollatz announced at the weekend that he was still open to buying thousands of apartments from the two real estate groups – even if the merger of the companies does not take place now. “We still assume that both companies will approach the state of Berlin in a timely manner, whether and, if so, how the purchase will proceed,” said the SPD politician. “We were offered a mixed portfolio.” Now it is the turn of the corporations to inform the country whether the offer is valid.
As part of the planned takeover, the companies had reached an agreement with the Berlin Senate on the sale of around 20,000 residential units to the state. In view of the housing shortage in the capital, the red-red-green government coalition wants to bring as many apartments back into state ownership as possible. It remains to be seen whether this will go as planned, as the sale of the apartment was also intended to get approval for the billion-dollar merger in Berlin. A referendum is also running in the capital with the aim of expropriating Deutsche Wohnen. Vonovia also wanted to undertake to limit the annual rent increases to a maximum of one percent per year over the next three years and to push ahead with the new building in Berlin. Apparently, regardless of the outcome of the takeover offer, Deutsche Wohnen wants to stick to the pact agreed with Vonovia and Berlin, the company said on Friday: “Talks with the Berlin Senate regarding the sale of a significant number of apartments from the portfolio will be continued.”
Bad defeat: Vonovia boss Rolf Buch failed with his plan.
(Photo: Jakob Hoff / imago)
After the failure was published, Vonovia announced that it would now examine the next steps. It is therefore conceivable that the group will sell its Deutsche Wohnen shares, buy additional shares or make a new offer. In addition, the Deutsche Wohnen shares bought by Vonovia are worth more than they are in the books. “Vonovia continues to believe that a merger with Deutsche Wohnen makes strategic sense and creates added value for the shareholders of both companies,” announced the group.
The financial damage caused by the failed takeover is limited, according to Buch: “For example, the banks are paid on a performance-related basis – they don’t get anything now.” It is the second time that Vonovia’s takeover has failed. The first time the board of Deutsche Wohnen resisted.