A takeover bid that would have resulted in Europe's largest rental property company has failed for a second time after Germany's Vonovia was unable to secure sufficient shareholder backing in its target Deutsche Wohnen.
Kottbusser Tor, Kreuzberg, Berlin, where Deutsche Wohnen owns the vast majority of the formerly publicly-owned apartments. Photo: Alexander Rentsch / Flickr. Licence: CC BY-NC-ND
The deadline for shareholders of Deutsche Wohnen to tender stock expired last Wednesday and in order for the deal to have gone ahead, Vonovia needed to collect at least 50% of its rival's shares.
On Friday, the company announced that it had only received commitments for 47.6% of the shares, and warned that it was unlikely to reach its target.
If the €18 billion takeover of Deutsche Wohnen had gone ahead, Vonovia would have become the largest real estate group in Europe, with more than 550,000 apartments in its portfolio worth €80 billion.
Deutsche Wohnen had urged its shareholders to accept the takeover bid, arguing that the necessary investments in climate protection, new buildings and affordable housing were better shouldered together after a merger.
This was the second attempt by Vonovia to acquire Deutsche Wohnen. A hostile takeover bid in 2016 failed to win acceptance from shareholders and was vocally opposed by CEO Michael Zahn.
The merger was given the go-ahead by regulatory authorities last month. The market was too fragmented for a takeover bid to be a threat to competition, the watchdog concluded, pointing to Berlin where, of the 1.7 million rental apartments in the city, 150,000 belong to Vonovia and Deutsche Wohnen.
Read more: Germany's Largest Landlords Agree €18bn Merger Amid Expropriation Calls
The news will come as a blow to the embattled Deutsche Wohnen. It was recently announced that a public campaign, "Deutsche Wohnen Enteignen" (Expropriate Deutsche Wohnen) had reached the 175,000 signatures needed to force a referendum on the issue of renationalising the property company, which was privatised in 1998. The public vote will take place in Berlin on September 26, on the same day as the country votes in the national elections.
Translation: "The merger of #Vonovia and #DeutscheWohnen has failed for the time being. We know another trick that the two of them can use to find each other under one roof later on.
09/26 vote 'yes' and finally act in the interests of the tenants."
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