German real estate giant in bid for rival

BERLIN - German real estate giant Deutsche Wohnen outlined on Tuesday a 1.75-billion-euro ($2.3-billion) takeover offer for rival company GSW, and GSW shares jumped.

GSW said in a separate statement that it was examining the offer and would decide how to respond to it once it had completed its assessment.

"The goal of the takeover is to create a leading German residential real estate company, to achieve synergies and to enhance the operative performance as a consequence of the merger," Deutsche Wohnen said.

"Deutsche Wohnen AG intends to continue its current strategy to focus on dynamic growth regions such as Berlin."

The two companies will have a combined real estate portfolion of 8.5 billion euros.

Under the terms of the deal, Deutsche Wohnen will offer 51 of its own shares for 20 shares in GSW.

Upon completion, GSW shareholders will hold a 43-percent stake in the combined entity.

Both groups are listed on the Frankfurt stock exchange and have a number of common shareholders, such as BlackRock and MFS, or Norwegian bank Norges Bank.

The deal needs regulatory approval and the green light from at least 75 percent of GSW shareholders and is expected to be completed in the first half of 2014.

GSW shareholders appeared to like the offer and GSW shares soared 7.94 percent to 33.97 euros, while Deutsche Wohnen shares shed 3.50 percent to 13.66 euros.

Deutsche Wohnen plans to undertake a capital increase to finance the takeover.

Copyright AFP
All rights reserved. This material may not be reproduced, published, broadcast,
rewritten or redistributed without prior permission in writing from AFP.

Get commercial property news by email

Free alerts when we publish — pick a focus or get everything, unsubscribe in one click. Subscribe »