CA Immo rejects Starwood offer

Austrian property group CA Immo has rejected a partial takeover offer by US investment firm Starwood Capital Group, it said last week.

Starwood had hoped to bag a 26% stake in CA Immo and around 5% in its rival Immofinanz. The offer, which was launched in April, has an acceptance period expiring on 30 May 2018.

CA Immo’s management board has decided that neither the CA Immo treasury shares nor the Immofinanz shares held by CA Immo will be tendered into the respective voluntary partial offer of SOF-11 Starlight 10 EUR S.à.r.l., Luxembourg.

‘There were a couple of reasons why we turned down Starwood’s offer,’ Christoph Thurnberger, head of capital markets at CA Immo, told REFIRE. ‘It was partly because we thought the price was too low – the offer reflected the stock price but nothing more than that –so it didn’t represent a unique opportunity to sell. In addition, Immofinanz is our core shareholder, with a 26% stake, and they have announced their intention to sell that stake, so we thought any sale on our part should be something for the new owner.’

CA Immo currently holds a total of 5,780,037 treasury shares. Based on the total number of 98,808,336 issued shares, this corresponds to about 6% of the shares. Furthermore, CA Immo Group holds 54,805,566 bearer shares (or about 5%) in Immofinanz.

CA Immo did not give any recommendation on the offer overall. Immofinanz has dismissed Starwood's bid for a stake as too low.

Immofinanz and CA Immo first toyed with the idea of a merger back in 2015 but talks broke down acrimoniously in the same year before being reignited in 2016. Both parties conceded at the time that the merger was fraught with obstacles and talks floundered. Initially, the merger was expected to create an entity with ‘substantial synergies’, according to Immofinanz's CEO Oliver Schumy, generating annual cost savings of around €33m.

Starwood, for its part, said in a statement in March that it believed that ‘the substantial capital resources and experience we can contribute as a strategic shareholder of CA Immo and Immofinanz could provide significant value’.

CA Immo’s rejection marks the second setback for Starwood this month: It was outbid by Germany’s biggest residential landlord, Vonovia, for Swedish property group Victoria Park.

Also, CA Immo has an ambitious development pipline, at €1.1b of properties due for completion by the end of 2020, of which €1b is in Germany, including Frankfurt’s Tower 1, a €350m office and hotel scheme in Frankfurt’s Europaviertel.