The sale of German real estate lender WestImmo sale is heating up, with second-round bids now in. On Friday, second-round bids were submitted for the Mainz-based bank, which is being sold by it sole shareholder, WestLB. Blackstone, Apollo, Aareal and Terra Firma are all thought to have submitted bids, according to those who track the market. Bernhard Kluge, a director at Citigroup in Frankfurt who is advising on the sale, declined to comment.
The sale of German real estate lender WestImmo sale is heating up, with second-round bids now in. On Friday, second-round bids were submitted for the Mainz-based bank, which is being sold by it sole shareholder, WestLB. Blackstone, Apollo, Aareal and Terra Firma are all thought to have submitted bids, according to those who track the market. Bernhard Kluge, a director at Citigroup in Frankfurt who is advising on the sale, declined to comment.
WestLB has said that it is primarily interested in selling 100% of the shares in its property bank WestImmo for cash. Bidders may, however, suggest an alternative acquisition structure which results in a majority participation of the bidder in WestImmo, or in an entity which absorbs WestImmo, the bank has said.
There is no current book value published for WestImmo but at the end of 2008, WestLB valued it at EUR 850 mln. However, offers are likely to be below book value, causing concern that a fire sale could be on the cards, according to those who track the market. WestLB must sell WestImmo to meet European Commission demands for a radical restructuring in exchange for approving a bailout. WestLB has to find new owners by 2011.
Last year, the bank increased its lending commitments in commercial property financing to EUR 6.2bn, 13% up on the previous year (EUR 5.5 bn). Only 12.5% of total new business related to loan extensions. The bank's operating profit was EUR 147.7 mln, a slight increase on €141.8mln the previous year. Total assets were EUR 27.2 bn as of 30 June 2009.
