Shares in Germany's Deutsche Wohnen Jump on Vonovia's $23 Billion Takeover Bid
May 25 2021 - 5:05AM
Dow Jones News
By Mauro Orru
Shares in German residential-property company Deutsche Wohnen SE
soared Tuesday after peer Vonovia SE put forward a takeover bid
valuing the company at about 19.08 billion euros ($23.31
billion).
At 0830 GMT, Deutsche Wohnen shares traded 15% higher at
EUR51.92, while Vonovia's shares traded 4.1% lower at EUR49.97.
Vonovia said late Monday that it would pay a total consideration
of EUR53.03 per Deutsche Wohnen share, with an offer price of EUR52
in cash plus Deutsche Wohnen's proposed dividend of EUR1.03 per
share.
The offer, which represents a 17.9% premium to Deutsche Wohnen's
Friday closing price, could create Europe's largest residential
real-estate group with a real estate value of about EUR90 billion
and a market capitalization of around EUR45 billion.
Deutsche Wohnen backs the deal aimed at establishing a
"tenant-oriented and socially responsible housing company" that
will work in close liaison with policy makers. Deutsche Wohnen's
Chief Executive Officer Michael Zahn said at a press conference
that the offer was fair.
"The housing market is facing major challenges, especially in
the German capital: affordable and senior-friendly apartments are
in short supply, many buildings need to be refurbished to improve
energy efficiency, and clearly there is a need to build more
affordable new housing. The combination with Deutsche Wohnen now
gives us the opportunity to effectively tackle these challenges,"
Vonovia Chief Executive Rolf Buch said.
Vonovia estimates the deal will bring cost savings of EUR105
million per year, mostly from the joint management of the portfolio
of more than 500,000 apartments as well as falling costs.
Berenberg analysts said the estimated synergies should be
achievable, with Vonovia's development pipeline receiving a boost
from the merger.
"As residential real estate offers substantial operational
synergies, we regard the envisaged cost advantages as achievable
and think that Vonovia's development pipeline will be strengthened
by Deutsche Wohnen's development activities," Berenberg analysts
said.
Vonovia expects to complete the takeover by the end of
August.
Write to Mauro Orru at mauro.orru@wsj.com; @MauroOrru94
(END) Dow Jones Newswires
May 25, 2021 04:52 ET (08:52 GMT)
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