Deutsche Wohnen has dropped its bid to acquire residential property rival LEG Immobilien in a deal that would have created a €17bn real estate portfolio.
LEG recommended the merger to shareholders last month.
Rival Vonovia, formerly Deutsche Annington, is now expected to make an offer for LEG, which owns 110,000 rented residential assets.
Michael Zahn, chief executive at Deutsche Wohnen, said that, despite initial widespread support for the merger, changes in recommendations from the most important proxy advisers meant it was no longer possible to obtain a 75% majority at an extraordinary general meeting later this month.
“As a consequence,” Zahn said, “we are no longer able to pursue our planned offer for LEG.
“We will now go about the task of dealing with Vonovia’s attempt with all of the necessary strength, diligence and support of our shareholders.
“The offer presented is not attractive for the Deutsche Wohnen shareholders.”
Berlin-based Deutsche Wohnen, listed on Deutsche Börse’s MDAX, currently holds 144,000 units, of which 141,900 are residential and 2,100 are commercial.
It failed in its attempt to take over Austria’s Conwert earlier this year, with shareholders in the latter rejecting the offer.
Deutsche Wohnen bought GSW Immobilien via a public takeover in 2013, creating a merged entity managing an €8.5bn property portfolio.