Real Estate Rift

Vonovia Fails in Record Real Estate Deal

Vonovia DPA2
Vonovia's dreams to create one of Europe's largest real estate firms are thwarted for now.
  • Why it matters

    Why it matters

    With the rejection of the Vonovia’s offer, one of the biggest consolidations in European real estate has been thwarted.

  • Facts

    Facts

    • Vonovia only won over 30.4 percent of Deutsche Wohnen investors, instead of the necessary 50 percent.
    • The deadline for support for the bid ended Tuesday night at midnight.
    • The share prices of both companies rose following the news of the unsuccessful deal.
  • Audio

    Audio

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It was a deal that nobody seemed to want – a bid that would have created a giant of German real estate and one of the biggest property companies in Europe. In the end, shareholders simply didn’t take the bait.

Germany’s largest real estate company Vonovia on Wednesday conceded defeat in a long-running hostile takeover bid for its biggest rival, Deutsche Wohnen.

Vonovia, in a statement, said that just 30.4 percent of Deutsche Wohnen’s shareholders had accepted its takeover offer as of 12:00 p.m. local time on Wednesday. “With that, the minimum acceptance threshold of 50 percent set by Vonovia has not been reached,” the company said.

The takeover would have been the largest-ever in German real estate, valued at €14 billion, including debt. Deutsche Wohnen’s management, which has fought tooth-and-nail against the merger for weeks, welcomed news of its failure on Wednesday.

“We are pleased and thank our shareholders, employees and renters for their support,” Michael Zahn, the chief executive of Deutsche Wohnen, said in a statement. “Our arguments against this transaction have convinced the market.”

Investors on both sides also rejoiced. Vonovia shares were up almost 6 percent by 3 p.m. Frankfurt time, marking the third-strongest gain in Germany’s blue-chip DAX index. Deutsche Wohnen shares rose just under 7 percent over the same period, leading gains on the MDAX index of mid-sized firms.

The deadline for the offer had ended at midnight on Tuesday. Leading up to it, Vonovia had been working for weeks to woo shareholders, with the tone getting rougher over time.

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