Vonovia: Growing influence of funds makes takeovers difficult | Free press

Berlin (dpa) – The growing influence of funds in stock corporations is making it difficult for real estate company Vonovia to merge in Germany.

“It will simply be more difficult to carry out such takeovers successfully,” said CEO Rolf Buch to the “Handelsblatt” with a view to the likely failed merger with the smaller competitor Deutsche Wohnen. The Bochum group announced on Friday that it could not secure enough shares for the takeover to succeed. The final result should be announced on Monday.

It was the second time that Vonovia wanted to take over Deutsche Wohnen – this time, however, with the approval of the Berlin company. Deutsche Wohnen boss Michael Zahn was supposed to become Buch’s deputy in the merged company. The takeover would have had a volume of 18 billion euros and would have created a real estate giant with more than half a million apartments. Both companies hoped for savings of 105 million euros annually through the joint management of their apartments and the joint purchase for modernization.

Vonovia would have needed at least 50 percent of the shares for the takeover, but according to Friday’s announcement it only got 47.6 percent. Buch explained the failure with the shareholder structure of Deutsche Wohnen: For example, index funds that replicate the Dax share index have not yet been able to transfer their shares. The remaining 30 percent of the shares were accounted for by hedge funds, which had hoped for a higher offer. “The market participants are aware that they have to heave the deal over the threshold in order for it to continue. But everyone wants to contribute as little as possible in the hope that they will get more for the shares that have not been tendered. Apparently someone miscalculated. “

In the opinion of the group leader, the increasing involvement of index or real estate funds makes such projects more difficult. The more “passive” money is distributed among the shareholders, the more difficult it becomes. “The discussion as to whether this is increasingly becoming a hurdle for big deals is certainly worth it,” said Buch. Because the index funds could not do anything, the project failed because of the hedge funds.

Vonovia announced on Friday that it would now examine the next steps. It is therefore conceivable that the group could sell its Deutsche Wohnen shares, buy additional shares or make a new offer. According to Buch, the financial damage caused by the failed takeover is limited. “For example, the banks are paid on a performance-related basis – so now they don’t get anything.” In addition, the Deutsche Wohnen shares bought by Vonovia are worth more than they are in the books.

The planned merger had fueled the debate about rising rents in major German cities and scarce living space. One focus was on Berlin, where Deutsche Wohnen, the largest private landlord, rents around 114,000 apartments, including in four World Heritage sites such as the Hufeisensiedlung. The two companies promised to cap rents in the capital, limit modernization surcharges, create more living space and offer apartments for sale to the state of Berlin. Buch now said that the offer of the land and the tenants were valid. Deutsche Wohnen made a similar statement on Friday. The state and the two groups had agreed to sell around 20,000 apartments.

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