Vonovia to buy BUWOG for €5.2bn in friendly deal

Monday, 18. December 2017 10:50

Amid a shift to concentration in the European real estate market, Germany's biggest apartment manager is on the way to snap up an Austrian competitor, saying it sees synergies of €30 million per year through 2019. BUWOG AG's board revealed on Monday that it backed a cash-only offer of €29.05 per each outstanding share from Vonovia SE, based in Bochum.

The preliminary deal puts the smaller landlord's enterprise value at €5.2 billion, including the potential conversion of convertible bonds. Holders of the debt will initially be entitled to €115,754 in cash for each convertible bond with a nominal value of €100,000, according to the business combination. The transaction is expected to be closed by mid-March, the companies said. The public bid for shares came with a premium of 18.1% to the closing price in the previous session.

"With the merger, Austria would become a sustainable part of our apartment portfolio. We furthermore strengthen our business model with the successful development business of BUWOG," said Rolf Buch, chief executive of Vonovia. The portfolio of 350,000 flats will be enlarged by BUWOG's stock of 49,000, where the contract puts the target entity in charge of the group's operations in Austria.

The German DAX index reached 13,271.28 points, the highest level since November 9, and traded 1.18% up at 10:32 am CET, at 13,258.36. Vonovia lagged, adding only 0.45% to go for €41.54 per share, but its session high of €41.615 was the strongest point since listing in mid-2013. It compares to the jump in BUWOG of 17.25% to €28.85 per share.

Related Links: Vonovia SEBuwog AG
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