German lender Aareal said on Tuesday that it has agreed to a voluntary public tender offer by a new company to be named Atlantic BidCo which is indirectly held by financial investors Advent International Corporation and Centerbridge Partner.
Under the agreement, shareholders will be offered €29 in cash per each Aareal share and the bank will not be allowed to make any distribution in cash or in kind until closing.
The offer, which values Aareal at €1.74 bn, represents a premium of around 35% to the volume-weighted average Aareal Bank share price over the last three months prior to 7 October 2021, when talks with the financial investors on the acquisition of a potential majority interest were confirmed by way of an ad-hoc disclosure.
Aareal's Chief Executive Officer Jochen Klösges said the offer 'is in the best interests of our company and its stakeholders'. 'The great interest shown by Advent and Centerbridge, and the intended offer by the bidder, are testament to the attractiveness and sustainability of our business model. We have considerable growth potential in all three segments. During the talks it became clear that we could even better leverage this potential together, through significant investments as well as our combined expertise and market access,’ he said.
Advent and Centerbridge have committed to support Aareal Bank's strategic ambitions to strengthen the bank’s position as a 'leading international provider of property financings as well as software, digital solutions and payments services'.
Specifically, in the event of a successful tender offer, the bidder intends to support organic and inorganic growth across all segments by retaining profits in the years to come. The retention of profits, based on a business plan supported by the bidder for the coming years, would generate substantial additional equity for exploiting attractive growth opportunities in all three segments, Aareal said.
Aareal plans to increase the lending portfolio to up to €40 bn over the next five years. This growth is to be fuelled by broadening the lending business in the bank's traditional asset classes and property types, but also by tapping new and attractive market segments and property types with the support of the investors.
The offer is conditional upon a minimum acceptance level of 70%. Advent and Centerbridge are expected to publish the offer document in mid-December, following approval by the German Federal Financial Supervisory Authority (BaFin).
