Dhe Wiesbaden real estate financier Aareal-Bank may soon disappear from the stock exchange. After weeks of negotiations, the board of the S-Dax-listed bank has now approved a takeover offer from the two financial investors Advent and Centerbridge. They are offering shareholders EUR 29 per share, which corresponds to a premium of 35 percent over the average price before the offer was announced.
The bank’s chairman, Jochen Klösges, emphasized on Tuesday that the investors wanted to push ahead with the previous strategy and maintain the bank as a whole: “Contrary to the speculation that has often been expressed, there will be no break-up,” said Klösges. “The announced offer is therefore in the best interests of our company and its stakeholders.”
“The bank is not a Christmas present”
With this, Klösges aims at the repeated allegations of the two activist investors Petrus Advisers and Teleios against the management and above all the supervisory board. The two hedge funds have publicly advocated the sale of parts of Aareal Bank, in particular the Aareon IT division, which is considered to be of high value. The hedge fund Teleios immediately announced resistance to the takeover: “Aareal is not a Christmas present for the supervisory board to be given away,” said co-founder Adam Epstein. The supervisory board is trying again to take the simplest route to the detriment of the shareholders, Teleios will try to ensure that it gets a structured sales process off the ground in the new year. Petrus did not want to comment on Tuesday when asked by the FAZ.
And yet another investor is now involved in Aareal Bank: On Friday evening, it became known that the Czech investor Daniel Kretinsky had increased his Aareal stake from 3.08 to 7.80 percent. Kretinsky is best known in Germany as an investor in lignite mining areas and through his entry into the Metro retail group, but he is also involved in the media group ProSieben Sat1 and the British football club West Ham United. What he plans to do with the Aareal investment is not yet known.
Will it be improved again?
The fact that he has now increased his stake again shortly before the foreseeable takeover could indicate that he is speculating on an improvement in the offer. Advent and Centerbridge have set a minimum acceptance threshold of 70 percent, so that mathematically not all investors have to be convinced. However, it is quite possible that the two financial investors will have to increase again. Since the offer became known two weeks ago, the price has already increased significantly, on Tuesday it rose again by 4 percent to around the 29 euros that financial investors are also offering. Aareal-Bank is now valued at 1.7 billion euros. The bank earns its money primarily by financing commercial real estate such as hotels, office buildings, shopping and logistics centers, as well as IT services for the industry.
For some time now, Advent has held a good third of its shares in the Aareon subsidiary, which is responsible for these IT services, and has recently supported it with a number of acquisitions. The cooperation could look similar at group level. Aareal-Bank is also to receive additional capital by not paying any dividends in the next few years. This retention of profits could bring up to 1 billion euros, which is to be put into the expansion of the real estate portfolio, among other things. Within the next few years it is to be expanded from 30 to 40 billion euros much faster than previously planned.
Dividend plans withdrawn
“We want to invest in the group in order to further develop the segments of the bank,” said Ranjan Sen, Germany head of Advent. The stop on dividends affects shareholders directly. They were originally invited to an extraordinary general meeting on December 9th to decide on a profit distribution for the 2020 financial year in the amount of EUR 1.10 per share. The board has now withdrawn this item on the agenda.
According to the placet, the offer documents are to be published by the financial supervisory authority Bafin in mid-December. The shareholders would then have until mid-January to decide. The final closing can then be expected by the middle of next year.