FRANKFURT--German real-estate business Deutsche Wohnen AG said that its bid to take over Austrian rival Conwert Immobilien Invest SE has collapsed after it failed to reach the minimum acceptance threshold.

The company had offered Conwert shareholders EUR11.50 a share in cash, worth over EUR980 million ($1.05 billion) at the time. However, it failed to attract the minimum acceptance of 50% plus one share, despite support from two major Conwert shareholders.

"Given that the minimum acceptance threshold regarding the takeover offer for Conwert shares has not been reached, the offers for Conwert's convertible bonds as well as the anticipatory mandatory offer for the relevant shares of ECO Business-Immobilien AG are no longer effective," the company said.

Deutsche Wohnen was mainly interested in Conwert's residential portfolio in Berlin, Potsdam, Dresden, Vienna and Leipzig, which is also the German firm's core portfolio region. The takeover would have fitted its strategy to further diversify its portfolio.

Conwert Immobilien said the offer failed to attract enough shareholders even though the German firm had managed to secure acceptance pledges for major share packages should the offer have succeeded.

Conwert's largest shareholder, the Haselsteiner Familien-Privatstiftung, and another major investor, Karl Ehlerding and his family, had endorsed the deal and had committed to tender about 25% of their directly and indirectly held stakes in the Vienna-based real-estate company.

"Management sees the rejection of the offer as a mandate from shareholders to continue to improve profitability and, as announced, to review the financing structure to start a significant reduction in interest costs," Conwert said.

Nevertheless, Conwert anticipates further consolidation in the property sector in Germany and Austria, and said it would "strive to achieve the best possible results for shareholders in the course of this consolidation process."

The acquisition was the latest in a series of deals in the German and Austrian real-estate sector.

In March, Austrian real-estate investor Immofinanz AG bid EUR18.50 a share for a stake of up to 29% in its peer CA Immobilien Anlagen AG. The deal would be worth about EUR530 million.

The move comes after CA Immo and Russian O1 Group Limited earlier this month offered to buy an additional 13.5% in Immofinanz for EUR2.80 a share. Immofinanz' executive and supervisory board have since recommended shareholders not to accept the offer, calling the offer price "inappropriate."

Write to Neetha Mahadevan at neetha.mahadevan@wsj.com

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