Aareal Bank agrees takeover terms, Atlantic BidCo becomes new owner

As expected, the bidding consortium led by Advent and Centerbridge was successful at the second time of asking in its efforts to take over the Wiesbaden-based real estate financier Aareal Bank. Having reached its acceptance threshold of 60%, the bidding vehicle Atlantic BidCo is now the new majority owner of Aareal - subject to the usual approval from the regulatory authorities. The final offer values the bank at €2bn.

The new improved offer of €33.00 per share, up from the previous €31.00, and which includes a dividend of €1.60, ultimately proved enough to convince disgruntled shareholders Petrus Advisers, Talomon, Teleios and Vesa to offer up their collective 37% shareholding. They will now end up owning a stake of up to 25% in the new company, albeit with limited voting rights which will prevent them having any major say in the future development of the bank.

According to Jochen Klösges, Aareal Bank's CEO, "The bottom line for us is that we can increasingly implement our strategy in all three business segments with the support of the new investors. We see the new, stable ownership structure as an advantage, especially in pursuing our sustainable and long-term goals."

The agreement with the new owners will see a boosting of the loan book from its current €31bn to up to €40bn. The bank's highly profitable IT subsidiary Aareon will also be furnished with sufficient funding to make acquisitions as they arise, as guaranteed by the agreement.

Aareal Bank has traditionally been the most active international lender among the big German real estate financing banks. It has been typically strong in the office, hotels and shopping centre segments, as well as increasingly in software, digital solutions and payment services.

Shareholders who have not already tendered their Aareal Bank shares in the voluntary takeover offer can do so during a further acceptance period, which is expected to begin on 31st May 2022 and end at midnight on 13th June. Completion of the takeover is expected in the fourth quarter of 2022 or the first quarter of 2023.