Conwert Investor Ehlerding Says Deutsche Wohnen Bid Will SucceedDalia Fahmy
Deutsche Wohnen AG will probably succeed in its 980 million-euro ($1 billion) bid for Conwert Immobilien Invest SE, overcoming opposition from some investors, according to shareholder Karl Ehlerding.
Ehlerding and his family, the fourth-largest shareholders, agreed to sell their 6.6 stake in Vienna-based Conwert. He estimates Deutsche Wohnen has support from shareholders with at least 40 percent of the stock, the Hamburg-based investor said by phone Monday. Deutsche Wohnen needs 50 percent plus 1 share to complete the deal. The offer period ends on Wednesday.
“My feeling is 40 to 45 percent of the investors are in,” Ehlerding said in the interview. “If it doesn’t work out, there’ll be a war.” Deutsche Wohnen won’t know how many investors are in favor of the deal until the votes are tallied, a company spokeswoman said.
Deutsche Wohnen, Germany’s second-largest residential landlord, is making a last-ditch effort to rally investors to accept its offer. The 11.50 euros-a-share bid for Conwert, announced in February, sparked a debate between shareholders who say the price is too low and others who say Deutsche Wohnen would save Conwert from poor management.
“The management has always said things would improve, but they’ve pulled us into a terrible financing situation,” said Ehlerding. A spokesman for Conwert said the company is working on a plan to reduce its financing costs.
If the bid fails, Conwert’s share price will probably drop to as low as 9.50 euros, Ehlerding said. In that case, Ehlerding would make his own offer to buy about 40 percent of the company for 10.25 euros per share, he said.
Conwert traded at 11.40 euros at 3:50 p.m. in Vienna. The shares closed at 10.97 euros on the day before Deutsche Wohnen made its offer.
“Once the price gets to 9.50 euros, we’ll start anew and try to make something out of the ruins,” Ehlerding said, adding that four wealthy families from Frankfurt and Hamburg have agreed to join him with a bid at 10.25 euros. “We’d dig in, put in a new team. If we don’t do anything, things will keep getting worse with Conwert,” he said.
Conwert’s biggest shareholder, Haselsteiner Familien-Privatstiftung, agreed to sell a 19 percent stake in the company, leaving it with 5.1 percent of the stock, Deutsche Wohnen said in February.
Shareholders who have said publicly they’re opposed to the deal include Petrus Advisers LLP, which owns about 6.7 percent, and Alexander Proschofsky, who last year said he owned 1.5 percent of Conwert via Cube Invest.
“I’d welcome it if the deal goes through because then things will calm down,” Ehlerding said.