Conwert shareholders reject Deutsche Wohnen's €1.2b takeover offer

Deutsche Wohnen's €1.2 bn takeover bid for Vienna-listed property firm Conwert Immobilien Invest has failed to win the backing of Conwert's shareholders.

Deutsche Wohnen's €11.50 per share tender offer expired on Wednesday. Shortly afterwards Conwert's management announced that the majority of its shareholders had not accepted the offer, and that 'the shareholder structure therefore remains unchanged at present.'

In its statement Conwert added: 'Management sees the rejection of the offer as a mandate from shareholders to continue to improve profitability and, as announced, to review the financing structure in order to start a significant reduction in interest costs.'

But the board added: 'Management anticipates a further consolidation in the property sector in Germany and Austria. The administrative board and executive directors will strive to achieve the best-possible results for shareholders in the course of this consolidation process'.

Deutsche Wohnen, Germany's second-largest listed residential firm with 147,000 units, conceded defeat on the issue: 'Given that the minimum acceptance threshold regarding the takeover offer for Conwert shares has not been reached, the offers for Conwert's convertible bonds as well as the anticipatory mandatory offer for the relevant shares of (unit) ECO Business-Immobilien AG are no longer effective.'

The bid
Conwert's board had already advised rejection of Deutsche Wohnen's bid at end-March as 'inadequate'.

'With regard to the offer price, the administrative board has reached the conclusion that the stand-alone value of the business per Conwert share, i.e. the value of the business without taking into account any synergies, is already above the offer price offered by the bidder,' Conwert said.

The view is also supported by an inadequacy opinion issued by JP Morgan, the company added.

Nevertheless, two of Conwert's largest shareholders, Haselsteiner Familien-Privatstiftung and Karl Ehlerding and family, had committed to tender a combined stake of 25.6% in Conwert had the tender offer for at least 50%, plus one share succeeded.

Conwert owns €1.8 bn of residential property and around €1 bn of commercial property in Germany and Austria.

The next step in the consolidation wave sweeping the listed property sectors of Austria and Germany comes on Friday. Vienna-listed CEE developer-investor Immofinanz is holding a shareholder meeting to seek permission for its €530 mln bid for a 29% stake in Austrian peer CA Immo. This is a counter bid for the €422 mln share offer tabled by CA Immo and Russian investor O1 Group for 13.5% stake in Immofinanz.