Vonovia Fails With $9 Billion Offer for Deutsche Wohnenby
Vonovia secures 30.4% of Deutsche Wohnen, below 50% threshold
Deutsche Wohnen climbs as much as 7.4%, Vonovia climbs 6.3%
Vonovia SE failed to get enough shares to acquire Deutsche Wohnen AG after a four-month takeover battle between Germany’s largest property companies, ending what would have been the biggest ever deal in the country’s real estate industry.
Vonovia secured about 30.4 percent of its main competitor by the Tuesday deadline, including those that Vonovia bought itself, the company said in a statement on Wednesday. Vonovia needed 50 percent for the 8 billion-euro ($9 billion) deal to succeed.
"The market climate hasn’t been helpful," Vonovia Chief Executive Officer Rolf Buch said on a call with reporters to discuss the outcome. Investors who had previously committed to backing the deal were now more concerned with the German stock market’s decline, he said. Investors had "other priorities" in recent days, he said.
The result settles an increasingly hostile feud in which Vonovia sought to cement its position as Europe’s biggest publicly traded homeowner. Deutsche Wohnen shareholders including MFS Investment Management, the company’s biggest, had spoken out against the deal. The investors balked at the price and said Vonovia should focus on its own business instead of making acquisitions.
Vonovia shares rose as much as 6.3 percent to 27.22 euros in Frankfurt after the result of the bid was made public, extending earlier gains. Deutsche Wohnen climbed as much as 7.4 percent.
The purchase of Berlin’s biggest landlord would have given Vonovia a total of more than 500,000 properties.
Buch, who has doubled his company’s properties since joining in 2013, promised Deutsche Wohnen shareholders annual savings of 84 million euros and faster earnings growth. Deutsche Wohnen CEO Michael Zahn countered that the savings couldn’t be achieved and that the offer price was too low.