KKR Is Mystery Firm Looking to Buy $1 Billion Adler’s Assets
(Bloomberg) -- KKR & Co. is the investor looking to buy real estate assets worth more than 1 billion euros ($1.2 billion) from Adler Group SA, according to people familiar with the matter who asked not to be identified.
Adler said earlier on Tuesday it signed a term sheet with an unnamed alternative investment firm for the sale of about 14,300 units, mostly located in eastern Germany, to cut its leverage and bring its loan-to-value ratio to less than 50%, according to a statement. The sale is subject to due diligence and could close in the first quarter of next year, it said.
Representatives for KKR and Adler declined to comment.
The proposed KKR transaction is the latest step taken by Adler to reduce its 8 billion-euro debt pile that’s drawn scrutiny from short sellers. Two weeks ago, Adler entered an exclusivity period with rival LEG Immobilien SE for the sale of a majority stake in two holding companies owning assets worth almost 1.5 billion euros.
If completed, the KKR and LEG deals should cut Adler’s real estate portfolio by about 40% to around 40,000 units, giving it net proceeds of 1.4 billion euros. The transactions were agreed at a higher price than book value, Adler said in separate statements.
The German firm linked to financier Cevdet Caner has been defending itself from allegations published by Fraser Perring’s Viceroy Research earlier this month, which called Adler a “hotbed of fraud, deception and financial misrepresentation designed to hide its true financial position.”
Soon after rejecting the accusations, the company’s largest shareholder, Aggregate Holdings, has also signed a deal with Germany’s biggest landlord, Vonovia SE, to help repay bank margin loans in exchange for a call option on half of its stake.
Adler said the sale announced on Tuesday is its final strategic asset disposal. Adler will now focus on divesting development projects to cut its loan-to-value ratio.
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