Vonovia Formally Launches Tender Offer for Deutsche Wohnen
December 01 2015 - 1:40PM
Dow Jones News
FRANKFURT—Residential real-estate giant Vonovia SE Tuesday
formally launched its €14 billion ($15 billion) tender offer for
rival Deutsche Wohnen AG, a deal that would combine Germany's two
largest landlords.
Vonovia is offering seven of its own shares and €83.14 in cash
for every 11 Deutsche Wohnen shares, valuing the target company at
€26.46 per share. Deutsche Wohnen closed at €25.87 on Tuesday.
The offer begins Tuesday and closes Jan. 26, Vonovia said.
The move marks the largest hostile takeover approach in Germany
since Vodafone PLC's purchase of Mannesmann AG for more than $180
billion in 2000. To succeed, Vonovia needs to get at least 56% of
Deutsche Wohnen shares in the tender offer, taking two convertible
bonds into account.
On Monday, Vonovia shareholders approved a capital increase
necessary to go forward with the transaction.
"Our takeover of Deutsche Wohnen is a solid opportunity for us
to continue to follow through on our strategy and to exploit the
scalability of our platform, both in your interests and also in
those of our customers," Vonovia's chief executive, Rolf Buch, told
shareholders Monday, according to a published speech.
Vonovia owns and operates around 370,000 units in Germany,
compared with Deutsche Wohnen's roughly 164,000 units.
While bankers expected Vonovia's shareholders would approve of
the offer Monday, there remains some skepticism on whether the
company can secure sufficient Deutsche Wohnen shares with its
tender offer.
Deutsche Wohnen has repeatedly said Vonovia's combined cash and
share bid undervalues its prospects, dilutes its portfolio quality
and doesn't bring significant synergies.
Deutsche Wohnen Chief Executive Michael Zahn said in October
that he saw the company's intrinsic value at €26 per share, but
added a combination with Vonovia would expose shareholders to a
heightened risk profile. "So we ask clearly for a risk premium," he
said without elaborating further.
Write to Eyk Henning at eyk.henning@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
December 01, 2015 13:25 ET (18:25 GMT)
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