LEG Immobilien vows to stand alone as DW merger bid collapses

LEG Immobilien, Germany's third largest listed residential owner, has vowed to continue with its 'successful growth strategy on a stand-alone basis' after a proposed friendly merger with Deutsche Wohnen, the number two in the sector, collapsed.

Deutsche Wohnen issued a statement on Wednesday in which it admitted that it did not have the backing of 75% of its shareholders for the proposed €4.6 bn acquisition of LEG Immobilien. Support for the merger had been weakened by an unsolicited €14 bn cash and share offer by Vonovia, the number one listed residential landlord in Germany, to acquire Deutsche Wohnen.

Click here to read more about the collapse of the Deutsche Wohnen bid for LEG

Going it alone
LEG Immobilen issued its own update on Wednesday evening, emphasising that it was continuing with business as usual as a stand-alone concern. In particular, the company said, this would include ongoing expansion of its regionally focused portfolio in and around North Rhine-Westphalia.

'In recent weeks we have held talks with a number of our shareholders,' said Thomas Hegel, CEO of LEG. 'We have received highly positive feedback regarding our business performance and our established strategy. LEG has a strong business foundation. We are efficiently positioned and are achieving consistently strong rental growth on a highly attractive letting market. We have a winning strategy of regionally focused expansion.

'For this reason, we will keep on pursuing this strategy unwaveringly as we move ahead, and we will keep on adding value for our shareholders. We will also remain a reliable partner for tenants and municipalities as well as a responsible employer in North-Rhine Westphalia.'

LEG will report in depth on its strategy and further business outlook in its third-quarter earnings report on 12 November 2015.

The company owns 110,000 rental properties. The proposed merger with Deutsche Wohnen would have created a combined group with 250,000 flats valued at around €17 bn. A Vonovia-Deutsche Wohnen merger would create an unrivalled colossus with 510,000 homes in Germany.