Austrian listed property firm CA Immo and its Russian shareholder O1 Group are considering taking a minority stake in CEE developer-investor Immofinanz, the companies said in a joint statement.

Austrian listed property firm CA Immo and its Russian shareholder O1 Group are considering taking a minority stake in CEE developer-investor Immofinanz, the companies said in a joint statement.

'The investment may include a potential joint partial tender offer for around 15% of Immofinanz at a price around the current share price,' the companies said on Thursday.

Immofinanz shares closed at €2.51 the day prior to the announcement. The price represents a premium of about 15% to the three-month average of Immofinanz shares. It would represent an investment of €420 mln, valuing Immofinanz at €2.8 bn.

'A further announcement may or may not be made in due course and is subject to appropriate regulatory approvals, [...] as well as prevailing market conditions at that time,' the companies added.

Commenting on the announcement to Reuters, Immofinanz CEO Eduard Zehetner said the potential offer was 'laughable', adding that the two suitors would have to bid at least €4 per share. He also indicated that CA Immo and O1 may be seeking to build a stake of up to 26%.

Zehetner is stepping down as CEO at the end of April and will hand over the reins to colleague Oliver Schumy, currently CFO, who will assume the CEO post for five years on May 1.

O1 Group, one of the largest office owners in Russia, owns a 26% stake in CA Immo after launching an €18.5-a-share offer earlier this year.

Austrian press reports
The companies' statement came in response to an article in Austrian newspaper Die Presse reporting that O1 had already approached Immofinanz shareholder Rudolf Fries about buying his group's 6.5% stake.

Immofinanz' shares jumped more than 10% following the report, touching their highest level in about a year.

A tie-up between Immofinanz and CA Immo has long been rumoured. Last summer, Zehetner himself suggested that Immofinanz was interested in buying UniCredit's 16.8% stake in CA Immo. That stake was later sold to O1.

The companies cover the same geographies and are active in the same asset classes. Immofinanz has also built up a significant presence in Russia, where it owns five shopping centres in Moscow and a logistics centre in St. Petersburg.

Immofinanz owns roughly €6.8 bn in assets, largely for office, retail and residential use. It is active in eight countries across Central and Eastern Europe. The Russian portfolio generates roughly one-third of its income.

CA Immo is a Vienna-listed real estate company with a €3.5 bn portfolio consisting largely of office properties throughout Germany, Austria and Central Europe. The company has a market capitalisation of around €1.6 bn.

O1 Group is a private holding company which owns over 60% of O1 Properties, one of the largest office landlords in Moscow with almost 500,000 m2 of rentable space. Its portfolio includes the flagship $1 bn White Square complex in Moscow.