Vonovia fails to win support for €14b Deutsche Wohnen takeover

Vonovia, Germany's largest listed property group, said on Wednesday that it has failed to win sufficient shareholder support for its hostile €14 bn takeover bid for peer Deutsche Wohnen.

Vonovia failed to get enough shares to acquire Deutsche Wohnen after a four-month takeover battle, despite the fact that lowered the acceptance threshold for its hostile takeover in January. The announcement effectively ends what would have been the biggest ever deal in the country’s real estate industry.

Vonovia secured about 30.4% of its main competitor by the Tuesday deadline, including those that Vonovia bought itself, the company said in a statement. Vonovia needed 50% for the €8 bn deal to succeed.

'A value-enhancing opportunity for market consolidation has not come to fruition,' commented Vonovia's CEO Rolf Buch. 'The result affirms the further development of Vonovia's nationwide platform on the one hand, and Deutsche Wohnen's Berlin-focused portfolio management on the other.'

Stefan Kirsten, Vonovia's CFO added: 'We offered Deutsche Wohnen's shareholders an attractive, full price from the outset, in line with the mandate from our shareholders and our stated acquisition criteria. This was necessary to ensure a balance in the interest of both shareholder groups. It was equally important to hold on to the minimum acceptance threshold to avoid becoming a minority shareholder.'

Deutsche Wohnen's Buch reckoned the company has however somehow 'achieved its objective', ensuring that peer LEG remains an independent, listed company. 'LEG is an important partner for us, as demonstrated by the sale of around 14,000 apartments in November 2015.'

Deutsche Wohnen announced its intention to take over LEG at the end of September 2015 but a subsequent offer on Deutsche Wohnen by Vonovia effectively ensured the collapse of the deal shortly thereafter.

The tender offer was officially launched on 1 December. Vonovia offered seven of its shares and €83.14 in cash for every 11 Deutsche Wohnen shares. This values Deutsche Wohnen at €26.46 per share.

If successful, the acquisition would have created a colossus with more than 500,000 apartments and a market capitalisation of €20 bn.