Dmitry Mints, who runs the property holdings of his billionaire father Boris, says he has no plan to merge Austrian property companies Immofinanz AG and CA Immobilien Anlagen AG after building up stakes in both.
Immofinanz, the larger of the two, first needs to concentrate on improving its profitability by reorganizing assets, Mints said in an interview Saturday in Moscow. Boris Mints’s O1 Group Ltd. made a bid with CA Immo last month to buy 13.5 percent of Immofinanz AG, which would add to an existing joint stake of 4 percent.
“In the current situation, it doesn’t make sense to merge CA Immo and Immofinanz,” he said. “Immofinanz needs to restructure its portfolio of 550 assets to become more focused and more efficient.”
Merger talks between CA Immo and Immofinanz broke down last year, partly because of disagreements over who would control the joint enterprise, the companies have said. O1 Group spent about 475 million euros ($503 million) since last year to gain 26 percent of CA Immo, which operates offices in Germany, Austria and eastern Europe. Immofinanz responded to the bid for the 13.5 percent stake in the company with an offer to buy 29 percent of CA Immo.
Immofinanz has long been trading far below its net asset value, Dmitry Mints said. The company has too many properties in too many different sectors and locations and investors are worried about the company’s Russian holdings, which account for about a quarter of its 6.8 billion-euro portfolio, he said.
Immofinanz said in a statement that it’s in a “transition phase” after spinning off its residential unit last year and the company will continue to “streamline” its portfolio.
Mints called Immofinanz’s 531 million-euro counteroffer for CA Immo a diversion. “It’s a strange investment decision in a situation when O1 has golden shares in CA Immo and doesn’t plan to sell out.”
O1 Group’s O1 Properties Plc unit, headed by Dmitry Mints and part-owned by Goldman Sachs Group Inc., operates about 15 percent of Moscow’s prime offices. The group is expanding in Europe to gain scale and spread risk. Its rental income in Russia may drop by about 10 percent this year because of the country’s economic crisis, according to Mints.
O1 Properties dropped plans for a London share sale in 2012. The company is unlikely to try again this year amid low investor appetite for Russian stocks, Mints said.