FRANKFURT—Germany's Vonovia SE Wednesday walked away from its planned €14 billion ($15.7 billion) takeover of domestic rival Deutsche Wohnen AG as it failed to win over shareholders' support, bringing to an end a bitter wrangle between the country's biggest landlords.

"Our [mixed cash-share] offer deteriorated with declining capital markets" and there was no way to improve the offer, Vonovia's chief executive Rolf Buch told journalists Wednesday. Vonovia secured around 30.4% of stock from Deutsche Wohnen shareholders, a far cry from the 50% minimum threshold it had set under its offer.

The decision puts an end to the largest hostile takeover attempt in Germany since Vodafone PLC's $180 billion move on Mannesmann AG in 2000 and propelled shares of both companies. Vonovia shares rose more than 7% Wednesday, with Deutsche Wohnen trading up 6%.

Over the past couple of weeks, executives from both real-estate firms have fired arguments back and forth over whether the deal would work.

Deutsche Wohnen Chief Executive Michael Zahn repeatedly called Vonovia's move hostile, value-destructive and inadequate.

In a reaction to the failed bid, Mr. Zahn on Wednesday said he was "pleased" and thanked shareholders, employees and tenants for support.

Mr. Buch said that a sensible "opportunity for market consolidation hasn't come to fruition," adding the result affirms the further development of Vonovia's nationwide platform and Deutsche Wohnen's Berlin-focused strategy.

But he stressed that Vonovia's efforts at least thwarted Deutsche Wohnen's attempt to buy the country's third-biggest landlord, LEG Immobilien AG. "We've cemented our leading position," he said.

Mr. Buch said he currently doesn't plan to buy another listed real-estate company at the moment.

Deutsche Wohnen last September agreed to buy LEG in an all-share offer valued at €4.62 billion. The combined company would have created a strong number two in Germany with around 250,000 units, narrowing the gap with Vonovia which has roughly 370,000 units.

But Vonovia in October announced plans to take over Deutsche Wohnen, a move first reported by The Wall Street Journal, thereby derailing Deutsche Wohnen's deal with LEG.

"Our offer for Deutsche Wohnen was triggered by their move on LEG," Mr. Buch said Wednesday, adding Vonovia needs LEG as an independent partner.

William Wilkes contributed to this article.

Write to Eyk Henning at eyk.henning@wsj.com

 

(END) Dow Jones Newswires

February 10, 2016 09:45 ET (14:45 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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