Approval period has expired: Vonovia trembles about Mega Fusion

Thursday 22 July 2021

Approval period has expired
Vonovia trembles about Mega Fusion

Vonovia Real Estate Group needs at least 50 percent of its competing shares to acquire Deutsche Wohenen. The acceptance period has now expired and many papers are still missing. But the company calmed down.

Germany’s biggest housing group Vonovia will have to worry even more about its multi-billion dollar acquisition of rival Deutsche Wohenen. At the end of the acceptance period this Thursday night, the Bochum-based group was not yet able to report completion because not enough Deutsche Wohnen shareholders have yet offered their papers. A person familiar with the process said, “It’s tightening up. 50 percent isn’t reached yet.” However, it may take three or four business days for the final stock to arrive – for example from more distant areas. Another insider said the final result may not be known until Monday.

Most institutional investors do not submit their papers till the last minute. Vonovia would have to acquire at least 50 percent for the acquisition. Problem: Index funds (ETFs) are only allowed to sell their shares if it is certain that the merger is a good one. Deutsche Wohnen’s shares stood at €51.50 on Thursday, down from the offer value of €52.

A Vonovia spokesman said: “We will get more quotas. The final result may not be known until Monday morning.” Vonovia had acquired about 34 percent of Deutsche Vonnen as of Tuesday evening. The spokesperson said that more shares are being counted now. The fact that the result has yet to be determined, even after the deadline, is “due to process”.

The two real estate companies previously agreed to merge in late May after two unsuccessful takeover attempts. The cartel office gave the green signal in June. The last takeover attempt in 2016 failed due to 50 per cent quota. At that time Vonovia was only offered about 30 percent of the Deutsche Wohenen shares. According to the cartel office, Vonovia’s portfolio at the end of March included a total of about 354,000 self-dwelling units in Germany; Deutsche Wohnen has about 155,000 rental apartments, about 70 percent of which are in Berlin.