Immofinanz shareholders give green light to BUWOG spin-off
The shareholders in listred Austrian property group Immofinanz gave the green light earlier this month for management to clear the way for the spin-off of the group’s residential subsidiary Buwog. Shareholders will receive one share in the newly spun-off unit for every 20 that they own in parent company Immofinanz, while the unit will be floated on the Frankfurt stock exchange on the 28th April as an independent listed company. Subsequent listings will follow in Vienna and Warsaw.
The extraordinary general meeting was held in Vienna earlier this month, and shareholders voted almost unanimously (99.6%) to spin off 51% of the shares in Buwog initially, with a view to Immofinanz shedding further tranches of its remaining 49% holding over the medium term of two to three years. Immofinanz agreed to abide by certain restrictions on exercising voting rights in the business, and will cease to have a management role in running the newly-listed company.
Immofinanz has long been of the opinion that uncoupling its Buwog subsidiary would optimise value in both firms, and improve overall market capitalisation. CEO Eduard Zehetner said of the shareholder move in a statement, “This will now allow Immofinanz Group to simplify its structure, focus its strategy and establish the structural requirements for a more appropriate valuation of both companies - Immofinanz and BUWOG - in the capital market”, said Immofinanz CEO Eduard Zehetner. “We see BUWOG as an attractive investment. This conviction is reflected, among other aspects, in our 49% investment, which we will retain in the first instance.”
In taking the extra share in Buwog, shareholders will be foregoing a dividend for the current business year of 2013/14, but can expect to get a dividend again next year, said finance board member and Buwog CEO Daniel Riedl. By then the €900m which the company is paying for 18,000 apartment units in northern Germany should have been digested. Those assets, a key part of the plumping-up of Buwog for its stock market debut, were bought from the old RREEF subsidiary of Deutsche Bank and long-time partner Prelios, the successor company to the old Pirelli Real Estate.
According to Riedl, Buwog will now be well-positioned to benefit from opportunities in both its home markets - Germany and Austria - with its integrated and sustainable business model and conservative capital and financing structure. “An independent presence and direct access to the capital market will allow the company to better realise its growth potential,” he said. Buwog will start its new life with 54,000 residential units valued at €3.49bn, almost equally divided (49% Germany, 51% Austria, mainly Vienna) between its two main markets.
Immofinanz plans to sharpen its own particular profile after the Buwog spin-off to again be viewed as a specialist for office, retail and logistics property in its core markets of central and eastern Europe, with a future emphasis on Germany, Poland, Russia and Romania. The group sold €863m of property assets in the first three quarters of 2013/14, meeting its target for a €2.5bn sales program launched in 2010/11 “earlier than planned”, the company said.