Alstria Office REIT completes DO Deutsche Office takeover
Germany's first-ever REIT, the Hamburg-based Alstria office REIT-AG has now officially taken over fellow-listed DO Deutsche Office AG following its voluntary takeover offer. The new company will be Germany's largest commercial property company, with gross real estate assets of €3.5bn.
By the cut-off date of 21st October, Alstria had received commitments for 165m Deutsche Office shares, representing 90.60% of the total share capital and voting rights of Deutsche Office.
The Alstria-Deutsche Office merger is taking the form of an €800m all-share takeover, with Alstria offering one new Alstria share for 2.625 Deutsche Office stock, a 16.2% premium to Alstria’s share price when the deal was announced in summer.
DO Deutsche Office morphed out of the old listed REIT Prime Office AG, before it merged with funds managed by US private equity firm Oaktree. The American company owns 60.54% of Deutsche Office shares, and had already accepted the Alstria offer.
The deal is expected to be about 20% accretive to alstria’s FFO per share, boosting it to €0.75 this year, and the takeover will create cost savings of €2.5m annually, and up to €15m in financing benefits, the firms say.
The takeover of DO Deutsche Office will lead to a short-term loss for Alstria, after it writes down the value of Deutsche Office's assets by €80m by end-2015, along with a goodwill write-down and other associated takeover costs. Alstria say it will push its overall 2015 P&L account into loss for the year. However, it is guiding revenues up from €98m to €116m and FFO of €59m, up from 2014's €49m.