Aareal Bank buys Düsseldorfer Hyp, forecast boosted by €52m
We mentioned in last month’s issue of REFIRE that the Wiesbaden-based real estate financier Aareal Bank was rumoured to be in discussions to buy the small Düsseldorfer Hypothekenbank, a commercial property lender which got into difficulties a few years ago with its exposure to worthless bonds from the scandal-ridden Austrian bank Hypo Alpe Adria.
That deal has now in fact gone through, with Aareal agreeing to pay about €162m for the bank. DüsselHyp is currently owned on a caretaker basis by the BdB Bundesverband deutscher Banken, or Association of German banks, whose deposit guarantee fund bought the bank from US private equity investor Lone Star Group in 2015. The final price being paid by Aareal will depend on market fluctuations until the closing date, likely before the end of the year.
Aareal said it is not targeting any further strategic objectives by taking over the bank, and will continue to run down DüsselHyp’s loan book, which currently has a residual lending volume of €533m (June 30th2018).
Aareal CEO Hermann Merkens said, “With the acquisitions executed over the past few years, Aareal Bank has shown its skills in running down portfolios in an orderly, value-preserving manner, and in the swift, responsible integration of mortgage banks. We will leverage this expertise in the case at hand. At the same time, we have once again demonstrated our willingness and ability to exploit opportunities available on the market, in order to generate value for our shareholders.” He said he expects the acquisition to result in a positive one-off effect from initial consolidation in the amount of around €52m.
Aareal recently agreed an €800m debt facility with funds affiliated to US investor Apollo Global Management to finance a pan-European portfolio of logistics properties. The loan is for five years, and the deal was concluded in less than three months.