CPI Property eyeing 'undervalued' Immofinanz in latest expansion drive

Here we go again, yet another battle among, between, for and against the usual suspects on the Vienna market for listed property companies. But this time there's a new invader, this time from the Czech Republic, who's lining up a bid for listed Immofinanz AG - sound familiar?

Barely a few months ago, Immofinanz itself was involved in an unsuccessful tussle to take over fellow-listed investor S Immo. Following that defeat, Immofinanz CEO and major investor Ronny Pecik left the company and sold his holdings. Not surprisingly, both Immofinanz and S Immo had extensive cross-holdings in each other.

Now enter the Frankfurt-based CPI Property Group, the vehicle of Czech billionaire Radovan Vitek, which already owns property in Germany and CEE valued at €11bn, and who already controls a third of the shares in Immofinanz. A successful takeover of Immofinanz would boost those holdings by a further €5bn.

CPI itself owns 21.4% of Immofinanz's shares, while an alliance with a friendly third-party investor would ensure the delivery of a further 10.6%. CPI says it has already secured the equity and debt required for the takeover. In company statements, it highlights the complementarity of the two companies' portfolios in Germany and Austria.

CPI is also thought to be mulling a bid for - wait for it! - yes, S Immo, in which it already holds 11.6%, and which owns property valued at €2.7bn. But - and here's the thing - S Immo is also engaged in a bidding war for – yes, Immofinanz - and has bid €23.00 per Immofinanz share to the latter’s shareholders. CPI's offer is €21.20, lower than S Immo's. For the record, Immofinanz gives its NAV as about €30.00, hence both are bidding at a chunky discount to nominal NAV. Austria's takeover commission has given both companies until early January to revise and polish their offers.

CPI Property Group is the 100% owner of the 56-year-old GSG Berlin, which with almost 1 million sqm is the largest private office and commercial landlord in Berlin. The portfolio includes spaces ranging in size from 20 to 20,000 sqm for use as production facilities, offices, workshops or warehouses in architecturally imposing commercial courtyards and modern business parks, mainly in city centre locations with excellent connections to the transport network.

The company was also involved during this past summer, in a joint effort with German group Aroundtown, in an as yet unresolved takeover attempt of Globalworth Property Investments, one of the biggest office investors in the CEE region with a portfolio of over €3bn, almost equally split between Poland and Romania. The offer would have valued Globalworth at €1.57bn.