Adler Purchases 25% Stake in Conwert Immobilien for $316 Million

Adler Real Estate AG said it bought almost 25 percent of Austrian developer Conwert Immobilien Invest SE for 285 million euros ($316 million.)

Adler acquired the stake by buying MountainPeak Trading Ltd., which held the shares in Conwert, from owner Teddy Sagi, the Hamburg-based company said in a statement Monday. As part of the transaction, Adler will sell 175 million euros of mandatory convertible bonds.

Conwert announced plans to cut financing costs, reduce vacancies and focus solely on residential real estate in March. Shareholders rejected a takeover offer from Deutsche Wohnen AG a month later and then Chief Executive Officer Clemens Schneider stepped down, citing differences on strategy. Israeli billionaire Sagi became the company’s biggest shareholder in May.

The Vienna-based owner of about 27,000 homes in Austria and Germany reported losses for two of the past three years as property-sale proceeds slumped and financing costs rose. Adler’s decision to issue the convertible bonds is subject to approval of its shareholders.

Conwert was up 2.4 percent in Vienna trading at 11.31 euros as of 4:10 p.m. Adler gained 2.3 percent to 14.34 euros.

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