Vonovia SE's management board has signed a deal with Conwert's board to acquire all shares in the company.
Under the business combination agreement (BCA), Vonovia is offering all Conwert shareholders 74 Vonovia shares for every 149 Conwert shares, implying a price of €17.58 per Conwert share, based on the Vonovia closing price last Friday.
That represents a resulting premium of 23.8%, based on the Conwert average share price of the last six months of €14.20 per share. Alternatively, as stipulated by Austrian law, Vonovia will offer Conwert shareholders €16.16 per share for cash deals.
Vonovia said that the transaction would combine the complementary property portfolios of both companies, and allow Vonovia to expand its footprint in Leipzig, Berlin, Potsdam and Dresden, as well as Vienna.
'The planned takeover of Conwert presents Vonovia with a great opportunity to expand our portfolio in dynamic regions and cities. We are therefore making an attractive offer to Conwert shareholders and invite them to join our success story. Conwert shareholders will benefit from the premium offered, future synergies, and a higher dividend potential and pay-out ratio,' said Rolf Buch, CEO of Vonovia SE.
'Additionally, the takeover of Conwert further strengthens our market position in attractive regions in Germany and expands our footprint to the attractive location of Vienna. Our sophisticated, proven management platform will allow us to integrate Conwert seamlessly for the equal benefit of all shareholders and tenants,' he added.
Dr Alexander Proschofsky, Chairman of the Conwert Administrative Board, said: 'Vonovia's offer underlines the successful development Conwert has made in the last year. A merger with Vonovia constitutes an attractive opportunity to further develop Conwert's potential under a new roof. Subject to legal examination, we intend to recommend to our shareholders to accept this offer.'
With around 340,000 residential units across Germany, Vonovia plans to integrate Conwert's 24,500 residential units into its network, as well as gaining ground in Vienna, where it will maintain Conwert's headquarters. The Austrian property portfolios would still be managed by Conwert, which wil remain listed on the Austrian stock exchange.
Last year, Conwert rejected a lower takeover bid from Deutsche Wohnen, at which point Adler bought a 25% stake in Conwert.
SRC Research commented: 'All in all, the offer makes sense and has a fair pricing, in contrast to Deutsche Wohnen's poor offer from last year (€11.50 for a Conwert share). Thus, we expect a high acceptance among Conwert shareholders. In addition to that, the main shareholder Adler Real Estate has already committed to tender its stake.'
