Log in
Show password
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Dynamic quotes 
News: Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 
All NewsEconomyCurrencies & ForexEconomic EventsCryptocurrenciesCybersecurityPress Releases

Deal to create $22 billion German property giant stumbles

07/23/2021 | 01:33pm EDT
FILE PHOTO: An office building of the German property group Deutsche Wohnen is pictured in Berlin

By Alexander Hübner and Matthias Inverardi

DUESSELDORF (Reuters) -Europe's biggest real estate takeover could fall through, at least for now, after Germany's Vonovia warned on Friday that it likely had not secured the backing of enough shareholders in its target Deutsche Wohnen.

The deadline for Deutsche Wohnen shareholders to tender stock passed at midnight on Wednesday and Vonovia needs to collect at least 50% of its rival's shares for the deal to proceed.

Vonovia said the latest tally indicated it had only received commitments for 47.6%. A final result is due Monday.

The deal would create a $22 billion property giant with 550,000 apartments.

"A combination of the two companies makes a lot of sense," Vonovia Chief Executive Rolf Buch said in a statement. "Unfortunately, an insufficient proportion of the current shareholders of Deutsche Wohnen have turned in their shares."

The deal has been controversial in Germany amid tensions over soaring rents ahead of general elections in September. Executives have promised the merged company would work with politicians on providing affordable housing.

The offer price of 52 euros per share was fair, Vonovia said on Friday, though it would now "carefully consider all options available to it", including the launch of another public offer that could potentially sweeten the deal.

Buch failed in his 2016 attempt to take over Deutsche Wohnen. But unlike last time, Deutsche Wohnen's CEO favours the deal.

"The challenges on the real estate market could be shouldered even better together," Deutsche Wohnen CEO Michael Zahn said in a statement.

Earlier on Friday, a person familiar with the matter said some hedge funds, which hold about a third of Deutsche Wohnen's stock, may not have tendered shares in the hope a deal would eventually go through at a higher price.

Complicating matters, a number of hedge funds and index funds that hold Deutsche Wohnen shares are only able to trade in their shares once the minimum acceptance quota has been reached, Vonovia said.

"We aren't in distress," Buch later told Reuters in an interview. "Vonovia can proceed as before even without Deutsche Wohnen. Our business model isn't in question."

(Reporting by Alexander Huebner and Matthias Inverardi; Writing by Maria Sheahan and Tom Sims, editing by Kirsten Donovan, Keith Weir and David Evans)

© Reuters 2021
Latest news "Economy & Forex"
07:28aRolls-Royce agrees sale of Spanish unit ITP for $2 billion
07:24aCHINA EVERGRANDE : says stadium construction proceeding as planned
07:20aWhat is behind China's power crunch?
07:15aTSX futures gain as oil prices surge
07:15aPanic buying leaves up to 90% of fuel pumps dry in major British cities
07:12aShell's UK power retailer to grow by 25% after rival's default
07:10aBiohaven's drug candidate for neurological disorder fails study
07:09aRolls-royce holdings says it has clinched 1.7bn euros sale of its itp aero division to consortium comprising bain capital
07:07aBrent oil nears $80 a barrel amid supply constraints
07:05aNordicTrack-owner iFIT targets valuation of nearly $7 billion in U.S. IPO
Latest news "Economy & Forex"