Austrian groups still to make up their mind on Starwood offers
US property investment group Starwood Capital offers to buy minority stakes in listed Austrian property companies Immofinanz and CA Immo as part of its plan to enter markets in Central and Eastern Europe, traditional strongholds of the Austrian companies.
In an official statement, Starwood said: “Starwood Capital considers Austria, Germany and Central and Eastern Europe as attractive markets and is committed to increasing its exposure to property markets there.” The company said it wanted to buy up to 26% of CA Immo and up to 5% of Immofinanz. Starwood has €56bn in assets under management.
Immofinanz already owns 26% of CA Immo, although it said in February it was considering selling that stake after it effectively abandoned its plan to take over the company.
Starwood has said it supports both companies’ management teams and does not plan to acquire a majority stake in either firm. Both will remain listed on the Vienna Stock Exchange.
Starwood is offering shareholders of CA Immo a price of €27.50 per share minus the dividends paid, while the offer to Immofinanz’s shareholders was €2.10 per share minus the dividends paid. Both offers together amounted to over €800m, of which about €100m is for Immofinanz.
Immofinanz, whose offer expires on May 30th, has already rejected the offer as being too low. CA Immo, whose offer expires on May 30thafter an original deadline of May 16th, issued a statement on April 27thsaying each individual shareholder "must decide whether to accept or reject the offer on the basis of the shareholder’s own investment strategy and personal assessment of the opportunities and risks associated with the further course of business of CA Immo".
Just recently the Vienna- and Warsaw-listed Immofinanz - the largest shareholder in CA Immo with a 26% stake - announced the launch of a structured bidding process to dispose of its CA Immo shares, after abandoning plans earlier this year to make a full bid for the company. Its 25.7 million ordinary shares in CA Immo are worth about €700m at current market prices. The company's holdings also include four registered shares which carry the right to appoint members to the supervisory board.
At the same time, Immofinanz is paying €390m for more than 29% of S Immo, the third property group in Austria's blue-chip ATX share index. Immofinanz paid around €20 a share for 14.6 million S Immo shares from member companies of the RPR Group (headed by Ronny Pecik), as well as 4.9 million shares from the Tyrolean businessman Rene Benko's Signa Group to accumulate a 29.14% stake in S Immo. (Not surprisingly, S Immo itself owns 12% of Immofinanz – this is Austria, after all – Ed.)
Immofinanz said the deal would be funded from 'available liquidity and, if necessary, through additional bank financing'. The transaction is expected to close within a few months.
"The real estate portfolio of S Immo complements the Immofinanz portfolio in the office and retail areas," Immofinanz said in a statement. "The transaction is therefore expected to strengthen the market position of both companies and create synergies for the management of the properties. In the event of a future combination of the two companies, the increased size would lead to a stronger position on the capital market."