German listed residential property group Vonovia has announced plans to launch an €8 bn fully underwritten capital increase against contribution in cash with subscription rights for existing shareholders of Vonovia.
'This rights issue marks the final chapter of the business combination process with Deutsche Wohnen,' said Vonovia's CFO Helene von Roeder. 'When we announced the transaction in May we said that we had the intention to recapitalize with up to €8 bn of equity, depending on the acceptance ratio. After taking over 87.6% of the voting rights in Deutsche Wohnen we are now following up with a subscription rights issue, which is clearly the most shareholder friendly way to raise equity as it enables primarily existing shareholders to acquire new shares at an attractive price level.'
The new shares shall be offered to the shareholders which will be able to acquire seven new shares for every 20 shares they hold for a price of €40.00 per new share, corresponding to a discount of 22.5% to the TERP (theoretical ex-rights price). On that basis, Vonovia expects to generate gross proceeds of about €8 bn and intends to use net proceeds to partially repay amounts under the syndicated loan facilities agreement for the acquisition of Deutsche Wohnen.
Vonovia said that it has signed an underwriting agreement with joint bookrunners including Goldman Sachs, ING and JP Morgan to acquire all new shares at the subscription price. In addition, certain funds managed by APG Asset Management and Norges Bank, the Central Bank of Norway have pledged to exercise in full the subscription rights to which they are each entitled in accordance with the capital increase. To date, APG holds approximately 4.0% of the company's share capital and Norges Bank holds approximately 11.1% of the company's share capital.
The subscription period runs from 24 November 2021 to 7 December 2021. Closing of the rights issue is expected to occur on or about 13 December 2021.
