Goldman, Cerberus raise EUR 175m in GSW exit

US bank Goldman Sachs and private equity firm Cerberus have raised EUR 175 mln by selling their remaining 19.8% stake in German listed residential property group GSW Immobilien. Goldman Sachs and Cerberus were the two largest shareholders in GSW.

They sold over 7.9 million shares on Friday at EUR 22.18 per share, which is substantially higher than the EUR 20.25 per share the investors received for the placement of their initial 20% stake in October last year.

'The positive share price reaction reflects the fact that markets already expected Cerberus and Whitehall to reduce their stake in GSW entirely,' commented Kai Klose, an analyst with Berenberg Bank in London.

According to Klose the placement, which will result in higher index weightings for GSW, combined with favourable fundamentals for the Berlin housing market should lead to a stable share price performance and to a narrowing of the 20% discount to Net Asset Value at which the company is currently trading.

The move by the two opportunistic investors comes shortly after the termination of their six-month lock-up period, which started in April when GSW launched an Initial Public Offering on the Frankfurt stock exchange. The flotation generated EUR 470 mln in proceeds.

GSW closed the purchase in November 2011 of a residential real estate portfolio of about 4,800 apartments in Berlin from German listed housing group Gagfah for EUR 330 mln.

GSW is funding the purchase with EUR 115 mln raised through the IPO.