Shareholders in Germany's largest residential landlord Vonovia have backed a capital increase needed to fund the €14 bn hostile takeover of peer Deutsche Wohnen.
Shareholders in Germany's largest residential landlord Vonovia have backed a capital increase needed to fund the €14 bn hostile takeover of peer Deutsche Wohnen.
In a statement on Monday, Vonovia said shareholders representing 78.21% of its share capital voted in favour of the operation, therefore surpassing the minimum acceptance rate of 75%.
'We have always said that the decision would rest with the shareholders,' commented Rolf Buch, CEO of Vonovia.
Deutsche Wohnen investors will have to decide early next year whether to accept the offer of seven Vonovia shares and €83.14 in cash for every 11 Deutsche Wohnen shares they hold.
Vonovia, which changed its name from Deutsche Annington earlier this year, said in September that it planned to bid for its biggest competitor in a cash-and-share deal valued at €14 bn, including debt. The offer for Deutsche Wohnen is its 'best and final offer', CEO Buch said.
Earlier this month Deutsche Wohnen urged investors in the rival group to vote against the proposed takeover which its CEO Michael Zahn said it would destroy value for both firms.
Best results ever
Deutsche Wohnen has just posted the best figures in its history with €521.7 mln of third-quarter earnings versus €144.9 mln a year earlier. Funds from Operations (FFO I) increased around 38% year-on-year to €228.7 mln in Q3.
The group's loan-to-value (LTV) ratio stood at 41.4% on the reporting date, down from 51% at year-end 2014.
'Deutsche Wohnen is stronger than ever, operationally and from a financial perspective. With above-average rent potential, our successful disposals segment and profit-enhancing acquisitions, we are perfectly positioned to achieve further growth,' Zahn said in the third-quarter result announcement.
As at 30 September 2015, Deutsche Wohnen's portfolio included more than 149,000 residential and commercial units with a fair value of around €10.7 bn.
Earnings guidance
German residential landlord Vonovia also posted a strong result for Q3 and raised its earnings guidance for the year to €590-600 mln, up from a previous forecast of €560-580 mln.
Vonovia said funds from operations more than doubled to €432 mln in the first nine months versus €205 mln in the same period a year earlier. Growth was underpinned by the integration of Gagfah - which proceeds ahead of schedule - as well as by the recent takeovers of Franconia and Suedewo Group.
Vonovia's portfolio was valued at €23.1 bn at the end of September, compared with €12.8 bn a year earlier.Acquiring Deutsche Wohnen would increase Vonovia’s portfolio of apartments to 514,000 from 370,000 and make it Europe’s second-largest property company after Unibail-Rodamco by market value.