Bidding war brewing for control of Austria’s CA Immo

A battle is brewing in Vienna as two suitors bid for the hand of local listed property company CA Immo. US investing giant and major shareholder Starwood Capital, which holds a 29.99% share in CA Immo has - as expected - made a full bid for the company, but local Austrian group Aggregate Holding looks almost certain to make a counter-bid any day, topping Starwood's offer, and valuing CA Immo at €3.6bn, according to local observers.

In line with regulations, Starwood made its formal offer which is valid until April 9th, pitching its offer price at €34.44 per share which is below Friday's (26th February) closing price of €35.55, and which values CA Immo at €3.5bn. The Starwood offer is for all CA Immo's shares and the convertible bonds which it doesn't already own.

The key attraction for Starwood, led by Barry Sternlicht, is CA Immo's valuable holdings of office space and big land banks in the business districts of Berlin and other German cities, mainly Frankfurt and Munich. It first took an initial 26% stake in CA Immo in 2018 at €29.50 per share, raising it to 30% over the course of 2020.

The likewise Vienna-listed S Immo, which is the second largest shareholder (6%) in CA Immo behind Starwood, had already rejected the Starwood offer in January, as did fellow investor Petrus Advisers led by Klaus Umek, and another block around the smaller investor association IVA.

Aggregate Holding, the Luxembourg vehicle of Austrian investor Guenther Walcher, already has exposure to the German property market through its holding in listed Adler Real Estate AG, which itself maintains close links with Austrian businessman Cevdet Caner.

In anticipation of funding future acquisitions, Aggregate recently sold €500m in bonds. Aggregate is itself not trying to make a full takeover bid for CA Immo, instead being content with a minority stake in the business, it says. This may make its offer less attractive to investors, it is thought, as should Starwood not cede ground, it (Starwood) still controls so-called 'golden shares' that would still give it key control over the appointment of supervisory board members.