June 26 (Bloomberg) -- GSW Immobilien AG, the German property company that faced investor criticism over the March hiring of its chief executive officer, rose the most in 19 months after saying its CEO and its chairman will quit.
GSW, Berlin’s largest residential landlord by market value, rose as much as 5.3 percent to 30 euros in Frankfurt trading, the biggest gain since November 2011, boosting its market value to 1.5 billion euros ($2 billion). CEO Bernd Kottmann and Chairman Eckart John von Freyend, who oversaw his appointment, will both leave the company in July, the Berlin-based company said in a statement after the market closed yesterday.
Their departure ends two months of conflict that culminated at a Berlin meeting last week at which shareholders passed a no-confidence motion against Kottmann and voted to dismiss Freyend. The ouster represents a rare show of force by shareholders in Europe’s largest economy, where corporate-governance rules lag behind U.K. and U.S. standards, said Peter Papadakos, an analyst with Green Street Advisors in London.
GSW, which owns 60,000 apartments in Berlin, said on March 11 that CEO Thomas Zinnoecker would resign and announced a week later that Kottmann would succeed him. PGGM NV, which owns about 3 percent of GSW, called for votes on the appointment, saying the speed with which Kottmann was chosen raised questions about the thoroughness of the search. The Dutch pension administrator also criticized Kottmann and Freyend over their tenure at IVG Immobilien AG, a German real estate company now in debt-restructuring talks with creditors.
GSW has declined about 10 percent since PGGM called on Kottmann to quit on May 15, compared with a 14 percent decline in the EPRA FTSE/NAREIT index of German property stocks.
GSW’s biggest shareholders are Sun Life Financial Inc., BlackRock Inc. and Singapore’s wealth fund, according to data compiled by Bloomberg.
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