Fonciere des Regions, the French property investor with a stake in 32,000 German homes, agreed to increase its shareholding in the company that owns them in a deal valued at 1 billion euros ($1.3 billion) including debt.
FDR will pay for the stake with its own shares, the Metz-based company said in a statement today. After the exchange, FDR will own as much as 62.4 percent of Paris-based Fonciere Developpement Logements, from 31.6 percent at the end of 2012.
“Fonciere des Regions is increasing its presence in Germany, which features a solid economy and an attractive real estate market,” Chief Executive Officer Christophe Kullmann said in the statement.
FDR founded FDL in 2005 as a way to invest in European homes. FDL owns 3.2 billion euros of residential property, with 75 percent in Germany and the rest in France. In 2006, FDL bought 45,000 German apartments from Morgan Stanley.
FDL shareholders will receive six new FDR shares for every 23 FDL shares they own. ACM Vie SA and Covea Mutual Insurance Group, which together own 26.6 percent of FDL, have already agreed to exchange their shares.
The same offer applies to other minority shareholders who want to participate in the exchange. The deal will be completed in September, FDR said.
FDL was up 6.9 percent to 18 euros at the 5:30 p.m. close of trading in Paris, the biggest gain since October 2009. The company has a market value of 1.25 billion euros. FDR declined 3 percent to 60.54 euros.