Hotel and office investor Aroundtown said on Friday that it has tendered a total of nearly 67 million TLG Immobilien shares, or 59.4% of the capital, by the end of the initial acceptance period of its tender offer announced in October last year.
Aroundtown said that the level of acceptance 'endorses the merger as a friendly and agreed share-for-share business combination of the two companies'. 'Any increase in the acceptance rate within the additional acceptance period ending on Feb 7 will likely lead to a more expeditious realization of the expected synergies,' it added.
Aroundtown is party to an irrevocable undertaking agreement with Ouram Holding S.à r.l. relating to an additional 10.41% of TLG’s share capital.
Under the terms of the all-share deal, which has been recommended by TLG's management, TLG shareholders will get 3.6 Aroundtown shares, at a €27.66 offer price per TLG share - a 3.2% premium. The operation, which is no longer subject to any closing conditions, is expected to create a new company with a combined total of €25 bn of assets.
The merger contains ‘significant synergies’ according to the parties, with overlap in Berlin, Frankfurt, Dresden, Leipzig, Hamburg, and access to Munich, Amsterdam and London, representing over half of the combined portfolio.
As a result, it is expected the pre-tax funds from operations will increase from €110 mln to €139 mln over time, according to TLG.
'The significant acceptance of the exchange offer confirms our conviction that the combination with Aroundtown entails tremendous potential for value creation for TLG shareholders,' TLG’s Management Board and Supervisory Board said.
Goldman Sachs, Kempen and UBS are acting as financial advisers and Sullivan & Cromwell is acting as legal adviser to TLG.
