Germany's Vonovia Fails to Win Support for Deutsche Wohnen Deal
February 10 2016 - 10:00AM
Dow Jones News
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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