End of the road for Austrian mooted merger of Immofinanz and S Immo

After years of flirting with each other and mooting a merger, two of Austria’s three listed real estate companies have called off their merger plans as neither side can agree on what would constitute a fair exchange of each other’s shares.

Immofinanz had first proposed a takeover of fellow-listed S Immo, after its earlier attempt to merge with another Austrian developer CA Immo was kyboshed by its own shareholders, with American group Starwood stepping in to snap up Immofinanz’s 26% stake for €760m. 

The chairmen of both Immofinanz and S Immo have now evidently agreed to cancel their engagement after Immofinanz had proposed to S Immo to merge on the basis of a blended NAV valuation to be prepared in advance of the respective companies’ AGMs in 2020.

Immofinanz currently holds 29.1% of the shares of the smaller S Immo, while S Immo in its turn owns 12% of Immofinanz. Observers in Vienna had largely expected some form of further consolidation among the remaining three listed Austrian players, after Germany’s Vonovia had swooped in to buy up Viennese property companies Conwert Immobilien and BUWOG.

Immofinanz has a current market cap of €2.77bn and assets under management of €4.5bn, while S Immo’s stock market value id €1.49bn and a portfolio with a book value of €2.26bn.

There was even talk of the remaining three – Immofinanz, CA Immo and S Immo – looking to merge altogether, but that’s now certainly not going to happen. Last month CA Immo sold its remaining 4.5 million shares – about 4% of the company – in Immofinanz, a stake valued at about €111m. CA Immo said it was re-investing the proceeds in project developments in its core markets of Germany, Austria and CEE. CA Immo currently has a development pipeline of about 170,000 sqm of GLA valued at more than €870m, of which about €660m is destined to be kept in CA Immo’s own portfolio.