Deutsche Wohnen Declines on Capital Increase: Frankfurt Mover

Deutsche Wohnen AG (DWNI) fell for a fourth day in Frankfurt trading after Germany’s third-largest residential landlord by market value said it would sell more shares than some analysts expected to pay for an acquisition.

Deutsche Wohnen dropped as much as 4.2 percent to 11.14 euros, the lowest in a month. The stock was the biggest decliner on Germany’s DAX Mid-Cap Index (MDAX), which fell 0.2 percent.

The Frankfurt-based company announced a plan to raise as much as 475 million euros ($594 million) in a capital increase yesterday. Most of the proceeds will be spent on the purchase of almost 23,500 apartments from Barclays Plc (BARC), a transaction valued at 1.24 billion euros.

“The capital increase was a bit higher than expected,” said Kai Klose, an analyst at Berenberg Bank with a buy rating on the stock. Klose expected Deutsch Wohnen to raise about 380 million euros from the share sale. Frank Neumann, an analyst at Bankhaus Lampe who also has a buy rating, anticipated that the company would seek about 300 million euros.

Both analysts said the additional capital will enable Deutsche Wohnen to make more acquisitions, which will probably bolster the stock in the months ahead.

Deutsche Wohnen was down about 3 percent at 11.29 euros at 3:36 p.m., cutting its market value to 1.65 billion euros. The shares have lost 10 percent in the past four days, paring the gain for the last 12 months to 6.3 percent, a period in which the 50-member index known as the MDAX has declined 4.6 percent.

To contact the reporter on this story: Dalia Fahmy in Berlin at dfahmy1@bloomberg.net.

To contact the editor responsible for this story: Andrew Blackman at ablackman@bloomberg.net.

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