UK listed residential property owner Grainger said it has agreed to acquire German residential property firm FranconoRheinMain for up to EUR 45.8 mln in cash.
UK listed residential property owner Grainger said it has agreed to acquire German residential property firm FranconoRheinMain for up to EUR 45.8 mln in cash.
Grainger has agreed to acquire a 54% stake in the Frankfurt-listed FranconoRheinMain from its controlling shareholder, Franconofurt, for EUR 1.50 per share. The UK company will also make a tender offer for the remaining 46% stake at the minimum price required by German securities law, which is expected to be EUR 1.76 to EUR 1.80 per share. Assuming 100% acceptance of the tender offer, Grainger said the total consideration would amount to between EUR 45.3 mln and EUR 45.8 mln in cash. The tender offer is conditional on receiving acceptances that bring Grainger’s total stake in FranconoRheinMain to at least 70%.
Grainger already owns about 4,500 residential units in Germany with a market value of EUR 346 mln as of September 30, 2007. With the acquisition, it will gain FrancoRheinMain’s portfolio of about 2,300 units, primarily comprising apartments and houses in the Rhine-Main and Rhine-Neckar regions of Germany. As of September 30, the market value of FranconoRheinMain’s portfolio was about EUR 117 mln.
‘We are confident that we can generate competitive returns for our shareholders by applying our specialist asset management skills to FranconoRheinMain’s portfolio,’ said Quinton Hill-Lines, Grainger’s director of corporate development and funds, in a statement. ‘In addition, we continue to see considerable demand for co-investment opportunities from investors in our existing funds and we are exploring ways to extend this model across our portfolio.’
Grainger said the acquisition is expected to have a positive effect on its net asset value and earnings per share.
