Aroundtown SA (XTRA:AT1) executed a non-binding term sheet to acquire TLG Immobilien AG (XTRA:TLG) from BlackRock, Inc. (NYSE:BLK), AXA Equitable Holdings, Inc. (NYSE:EQH), Ouram Holding S.A.R.L., Xenopus Limited and others on October 26, 2019. Under the terms of the non-binding term sheet, the business combination will be by way of a voluntary public offer by Aroundtown for all shares in TLG Immobilien against a consideration consisting of new shares issued by Aroundtown. The exchange ratio will be determined based on Aroundtown's and TLG Immobilien's EPRA NAV per share, subject to statutory minimum price rules. Aroundtown SA entered into a business combination agreement to acquire TLG Immobilien AG for 3 billion on November 18, 2019. Under the terms of the agreement, TLG Immobilien shareholders to receive 3.6 Aroundtown shares for each TLG Immobilien share. Aroundtown has secured shareholder support from TLG's largest shareholder by entering into an irrevocable undertaking with Ouram Holding S.à r.l. for up to 27.9% of TLG's shares subject to certain conditions. Aroundtown does not intend to carry out a squeeze out of TLG Immobilien.
Aroundtown shall introduce a new management body consisting of five members, of which TLG Immobilien may nominate the TLG Immobilien, if Aroundtown holds more than 50% of all TLG Immobilien shares. Aroundtown will nominate the Chief Executive Officer. In case Aroundtown holds at least 66% of TLG Immobilien's shares, TLG Immobilien may nominate one of the remaining three members. One of the TLG Immobilien -nominated members shall be Co-Chief Executive Officer. Upon receipt of the requisite merger clearance, TLG Immobilien may nominate two out of four members in a newly formed integration committee at the level of Aroundtown, the primary objective of which is the discussion of the necessary steps to integrate both businesses. Further, TLG Immobilien may nominate an additional member to Aroundtown's advisory board. TLG Immobilien-nominated members of Aroundtown's management body and board of directors will retain their positions for a term of at least two years. Certain of TLG Immobilien's nomination rights are subject to TLG Immobilien's continued support of the exchange offer in its management and supervisory boards' reasoned statements. Gerhard Cromme (Chairman) and Gabay (vice chairman) will stay intact. The combined company will keep its seat in Luxembourg and is contemplated to do business under a new name to be defined jointly by Aroundtown and TLG. The German operational headquarters will continue to be in Berlin, Germany.
Closing of the offer will be subject to certain conditions, including antitrust clearance, approval of the offer document by BaFin and the non-occurrence of certain circumstances (e.g. material adverse change events) until the expiration of the acceptance period. The signing of any legally binding agreement and the decision of Aroundtown to launch a takeover offer is subject to the agreement of both parties with respect to all terms and conditions of a business combination, the final analysis of the synergies, due diligence, and the approval of any definitive agreement by Aroundtown and TLG. The voluntary public tender offer is not expected to be conditional on a minimum acceptance ratio. As of November 28, 2019, the German Federal Cartel Office approved the transaction. As of December 23, 2019, the management and supervisory board of TLG IMMOBILIEN recommended its shareholders to accept the offer from Aroundtown. As of December 23, 2019, Goldman Sachs Bank Europe SE issued an opinion that the exchange ratio for fair from financial point of view to the shareholders of TLG Immobilien. The transaction is expected to complete during the fourth quarter of 2019 to the fourth quarter of 2020. As of November 19, 2019, the transaction is intended to be concluded in first quarter of 2020. The acceptance period starts from December 18, 2019, and ends on January 21, 2020. The period can be extended by two weeks to February 4, 2020 if an amendment is published within the last two weeks prior to the expiration of the acceptance period. The transaction will be accretive to both shareholder groups from year 1, in terms of FFO and NAV per share, portfolio quality and strategic positioning. As of January 24, 2020, 59.37% of TLG shares were tendered into exchange offer by Aroundtown by end of initial acceptance period on January 21, 2020. TLG Shareholders who have not yet accepted the exchange offer continue to have the opportunity to tender their TLG shares during the additional acceptance period that will run from January 25, 2020 through February 7, 2020. The exchange offer is no longer subject to any closing conditions since all conditions were satisfied at the time of expiration of the initial acceptance period.
Goldman Sachs Bank Europe SE, Kempen and UBS are acting as financial advisers and Carsten Berrar, Konstantin Technau, Max Birke, Clemens Rechberger, York Schnorbus and Michael Rosenthal of Sullivan & Cromwell is acting as legal advisors to TLG Immobilien. Goldman Sachs Bank Europe SE also acted as fairness opinion provider for TLG Immobilien. JP Morgan, Deutsche Bank, Morgan Stanley, Kempen and Victoria Partners are acting as financial advisers and Marc-Oliver Kurth, Oliver Rothley, Sebastian Klabunde, Ralf Tietz, Ulrich Reers and Felix Paul of Taylor Wessing and GSK Stockman are acting as legal advisers to Aroundtown.
Aroundtown SA (XTRA:AT1) completed the acquisition of 77.5% stake in TLG Immobilien AG (XTRA:TLG) from BlackRock, Inc. (NYSE:BLK), AXA Equitable Holdings, Inc. (NYSE:EQH), Ouram Holding S.A.R.L., Xenopus Limited and others for 2.7 billion on February 7, 2020. Ntovelo Limited an indirect wholly owned subsidiary of Aroundtown owns 0.28% of TLG and Aroundtown has a call option to acquire 10.41% from Ouram Holding, which it will not exercise currently. So in essence, Aroundtown enjoys control over 88.19% of TLG capital. Following the agreed new improved governance structure, which will be implemented over the next 12 weeks, TLG decided the intended nominees to be Klaus Krägel and Barak Bar-Hen as members to the new management body of Aroundtown which will consist of a total of 5 members. The final composition of the management body will be decided in the near future.