Shareholders give TLG green light for WCM takeover

Listed German property group TLG Immobilien’s voluntary public takeover of its rival WCM Beteiligungs- und Grundbesitz-Aktiengesellschaft is a go, with 77.75% of shareholders accepting the takeover offer by the end of the acceptance period of 5 September.

An additional acceptance period will now run until 26 September, according to a spokesman for TLG. ‘I expect the formal closing of the transaction on 4 October,’ he told REFIRE.

This is in accordance with the German Securities Acquisition and Takeover Act, or Wertpapiererwerbs und Übernahmegesetz. Additional WCM shares could be tendered during the additional acceptance period from 13 September 2017, 0:00 hours (CEST) until 26 September 2017, 24:00 (CEST). During this period, WCM shareholders could exchange 5.75 WCM shares for every new TLG share.

TLG Immobilien announced back in May that it intended to take over WCM. Peter Finkbeiner, member of the management board at TLG, told REFIRE at the time that the group had been focused on growing its platform since its IPO in October 2014.

‘We told our investors that there are three key ways in which to grow: by acquiring single assets, by acquiring portfolios and by M&A activity,’ Finkbeiner said. ‘We want to acquire WCM because we strongly believe in economies of scale and because it’s important to have a substantial volume of assets in local markets. Together, we will continue to focus on offices and retail, although there is also a hotel component.’

WCM's portfolio is currently worth around €800m. Its major shareholder DIC Asset holds 25.95% of WCM’s share capital, which translates into a share total of 34,239,982 shares that were acquired by the company at the average price of €2.79 over several transactions. DIC has been supportive of the public takeover offer.

The new company will have a portfolio worth €3b, more than 75% of which is located in Berlin, Frankfurt, Dresden, Leipzig and Rostock. TLG also owns seven hotels in Berlin, Dresden, Leipzig and Rostock. The combined 447 properties have a rental income of €204m. The joint headquarters will remain in Berlin. The transaction is expected to yield cost synergies of around €5m per year.

Given the size of the combined company, it is likely to be included in Germany’s midcap index, the MDAX, although probably not before 2018.