Vonovia sells off remains of its Deutsche Wohnen adventure

01/02/2019

Vonovia sold off 16.8 million Deutsche Wohnen shares to institutional investors for €698.1mn yesterday evening. The shares date back to the time when Vonovia made a takeover bid of the Berlin-based property company: In early 2016 Vonovia had acquired almost 5% of Deutsche Wohnen shares directly in its attempt to purchase a majority stake. The takeover failed when the remaining shareholders did not offer enough shares. This maneuver, on the other hand, thwarted a merger of Deutscher Wohnen and LEG. Since then Vonovia has achieved growth through foreign acquisitions. Deutsche Wohnen’s shares have now been sold for €41.50 per share (lower than the closing price of €43.59 but far higher than the €24.10 that Vonovia paid at the time) for a total of €405.3mn.  The company intends to use the proceeds to strengthen its balance sheet, “in view of the fact that some debt securities will mature this year and a hybrid bond will be callable in April 2019”. The LTV ratio will decrease by about 80 basis points.


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