Mayr Melnhof - Karton AG
Oliver Schumy - Immofinanz
According to CEO Oliver Schumy, "By selling our shareholding at nearly the historical high point of the CA Immo share price we have realised a considerable profit, and by buying more of our shares back we're boosting our equity capital structure."
After much to-ing and fro-ing, and several rebuffed attempts, US private equity investor Starwood finally succeeded in buying a big piece of listed Austrian property investor CA Immo, when fellow listed Austrian player Immofinanz agreed to sell its stake in CA Immo to Starwood for $882m.
This long ongoing Austrian saga thus reaches a new milestone after the two Vienna-headquartered players cancelled their long-mooted merger this year under pressure from an activist investor. Once that proposed marriage had been called off, Starwood came a-wooing both Austrian groups, but was rejected by both. It had originally offered €84m less than the now-agreed price for a 26% stake in CA Immo. The Austrian cartel office has yet to approve the deal, but it is expected to go through.
The price paid of $882m or about €758m corresponds to €29.50 per share (current market price is €29.90), and includes four 'golden shares', entitling the new owner to nominate up to four directors to the supervisory board. Starwood's earlier offer was €27.50.
Immofinanz said it planned to use the proceeds to intensify its share buyback programme through the end of 2019, buying back up to 8.66% of the outstanding shares. It said it would have made a hefty profit of about €184m including dividends over the two year period it held the CA Immo shares.
According to CEO Oliver Schumy, "By selling our shareholding at nearly the historical high point of the CA Immo share price we have realised a considerable profit, and by buying more of our shares back we're boosting our equity capital structure." After paying down loans to finance the CA Immo stake, amounting to about €250m last year, the net inflow to Immofinanz should be about €508m, the company said.
Starwood's CEO Barry Sternlicht commented, “We see great potential in the Austrian, German and central and eastern European real estate markets.” With its “substantial capital resources and relevant experience”, Starwood would support CA Immo management as a strategic anchor shareholder, he said.
Speculation in Vienna now centres on whether Immofinanz might use some of its cash pile to make an all-out takeover offer for the last remaining significant Austrian player, S Immo, whose share price has risen on the speculative rumours. Immofinanz has already committed to buying a 29% stake in S Immo, which in turn owns a 12% stake in Immofinanz. Expect more drama from the rapidly-thinning ranks of Austria's listed property sector.
