German Landlord Merger Draws Fire from Even More Fund Managers
German Landlord Merger Draws Fire from Even More Fund Managers
(Bloomberg) --
Critics of a three-way deal to create one of Germany’s biggest landlords have recruited more dissenting investors to their cause.
Janus Henderson Group Plc and Sarasin & Partners have joined the growing chorus of voices arguing that ADO Properties SA’s planned acquisition of two debt-laden rivals is bad for minority shareholders, according to a statement from Timbercreek Investment Management, which also opposes the deal.
Janus Henderson’s co-head of property equities Guy Barnard said the fund manager sold its stake in ADO after the firm announced its intention to acquire Adler Real Estate AG, a landlord specializing in low-cost housing across Germany, and a stake in developer Consus Real Estate AG.
A spokesperson for Sarasin confirmed it supported Timbercreek’s statement.
The complex three way deal came about after Adler, which has links to Austrian businessman Cevdet Caner, acquired a 33% stake in ADO and used its position to appoint several new board members. Five days after that deal completed, ADO announced it would buy Adler and a stake in Consus, a decision that triggered a sharp fall in its share price but a boost in Adler’s and Consus’s.
“We see significant conflicts of interest in the current transactions because the decision makers have a high degree of loyalty to Adler, but their interests do not coincide with those of the other shareholders of ADO Properties,” Timbercreek portfolio manager Claudia Reich Floyd said in the statement.
Timbercreek has called for ADO to hold a vote on the transaction that would allow all shareholders to express a view.
The ranks of dissenting minority shareholders also include Germany’s third largest asset manager Union Investment Privatfonds GmbH, which holds about 5% of ADO and is its largest independent shareholder. Timbercreek asked the German regulator to block the deal in early February but BaFin has now permitted the publication of the offer document.
The deal is essential for ADO as it needs to diversify away from Berlin where legislators have imposed a rent freeze, Chief Executive Officer Thierry Beaudemoulin said in an interview with Bloomberg News last week, before Janus Henderson and Sarasin raised objections. High apartment prices mean it’s better for ADO to acquire a developer that can build new homes, he said.
Under German law there is no obligation to consult minority shareholders of the acquiring company, he added.
--With assistance from Irene García Pérez.
To contact the reporters on this story: Fabian Graber in London at fgraber2@bloomberg.net;Jack Sidders in London at jsidders@bloomberg.net
To contact the editors responsible for this story: Shelley Robinson at ssmith118@bloomberg.net, Chris Bourke
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