CENTRAL EUROPE Immofinanz launches S Immo takeover bid

The voluntary public takeover offer to acquire a controlling interest in S Immo is priced at EUR 18.04 per share on a cum-dividend basis, meaning that the price will be reduced by the amount of any dividend per share announced by S Immo between Immofinanz’s announcement and the settlement of an offer. The current price corresponds to the closing price of S Immo’s shares on the Vienna Stock Exchange on March 21st and represents a premium of around 13.75 pct on the average share price for the last six months of EUR 15.86. If successful, the offer would add 69.93 pct of S Immo’s shares to Immofinanz’s current holding of 26.49 pct, valuing the bid at more than EUR 928.6 mln. The completion of the offer would also be subject to merger control clearance, in particular in Austria, Germany, Romania, Slovakia and Hungary.

At the end of January, it was announced that the CEO of Immofinanz, Ronny Pecik, was to step down upon the completion of the sale of his 10.56 pct stake in the company to Revenite Austria, a vehicle controlled by Luxembourg-based Aggregate Holdings, which is wholly-owned by Austrian investor Günther Walcher. Pecik is also a major shareholder of S Immo, which was the subject of a failed merger with Immofinanz in 2019. In Q2 2018, a potential merger between Immofinanz and another Austrian competitor, CA Immo, also fell through. S Immo currently holds a 6 pct stake in CA Immo.

Since the beginning of this year, Aggregate Holdings has bought minority stakes in both Immofinanz (10.54 pct) and S Immo (10.79 pct). It also confirmed market speculation that it may be considering a takeover bid for CA Immo, which could derail the takeover bid of its largest shareholder (with a 30 pct stake) US property investment company Starwood, which was launched in late February. However, immediately after its offer of EUR 34.44 per share was placed, the stock market price rose above that level, where it has remained ever since. Aggregate has yet to make any definite move for CA Immo and insists that a bid might not materialise. Pecik played a part in Starwood’s acquisition of its stake in CA Immo in 2018. This resulted in the failure of Immofinanz’s own takeover bid for CA Immo at the time, prompting it to acquire its 26.49 pct stake in S Immo instead, which it is now using as the launch pad for its current takeover bid. S Immo also owns an almost 12 pct stake in Immofinanz.

All these recent deals and announcements are likely to fuel further expectation of an eventual three-way merger between CA Immo, Immofinanz and S Immo. In September 2020, S Immo’s portfolio comprised 351 properties had a book value of EUR 2.43 bln, 70 pct of which was offices, shopping centres and hotels with the remainder being residential. Around 33 pct of this was in the CEE region. CA Immo’s mainly office portfolio is valued at around EUR 5.3 bln. And Immofinanz, which is traded on the Vienna and Warsaw stock exchanges, has portfolio of office (65 pct) and retail (33 pct) that was valued at EUR 5.1 bln at the beginning of last year. All three companies are active in Germany, Austria and the CEE region.