By Joshua Kirby
German real-estate company Vonovia SE said it plans to raise some eight billion euros ($9 billion) through a subscription-rights issue, with the proceeds going toward the recently agreed-upon acquisition of peer Deutsche Wohnen SE.
Vonovia said Sunday that it plans to issue just over 200 million new shares with a notional value of EUR1. The new shares will be offered to existing shareholders through an indirect subscription right at a ratio of 20 existing shares to seven new ones, and a subscription price of EUR40.00, it said. Shares in Vonovia last closed at EUR55.72.
The capital raise should allow the company to generate gross proceeds of around EUR8 billion, which will be used to partially repay a loan taken out to pay for the acquisition of Deutsche Wohnen. The deal was agreed to last month on Vonovia's third bid of EUR53 for each Deutsche Wohnen share.
Subject to regulatory approval, the subscription period will begin Wednesday and last until Dec. 7, both inclusive, Vonovia said. Any unsubscribed shares will then be sold on the market or via private placement at a price at least equal to the subscription price, the company said.
The rights issue is a "shareholder-friendly" means of raising equity since it allows existing investors to acquire new shares at an attractive price, the company's chief financial officer, Helene von Roeder, said.
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(END) Dow Jones Newswires