Austrian Landlord Immofinanz Revives Bid for S Immo Once Again

Immofinanz AG has revived its attempt to combine with Austrian real estate competitor S Immo AG, nearly a year after the coronavirus pandemic derailed talks between them.

Vienna-based Immofinanz made a voluntary public offer for the shares of S Immo AG that it doesn’t already own at EU18.04 apiece on a cum-dividend basis, according to a statement on Sunday. Immofinanz, which owns more than a quarter of S Immo, said the offer price represents a 14% premium for the shares over the past six months.

S Immo and Immofinanz have been weighing options to combine for years. Most recently, the two landlords were in talks to merge early last year and were considering whether to formally revive those conversations when the coronavirus pandemic forced them to delay their plans.

The abandoned talks and the lingering effects of the pandemic caused shares of both companies to plummet last year, with S Immo dropping 24% and Immofinanz falling 29%. S Immo has recouped some of that so far this year, leaving it with a market capitalization of about 1.3 billion euros ($1.6 billion) -- Sunday’s offer matches the stock’s Friday close.

In November, a top Austrian hedge fund rebuked Immofinanz for dropping the merger plans, arguing that it destroyed shareholder value by doing so. At the time, Immofinanz couldn’t afford S Immo with its current cash pile.

Read more:
Austrian $8.4 Billion Property Battle Roughed Up by New Player
Immofinanz Should Merge to Stop ‘Destruction,’ Hedge Fund Says

Immofinanz, with a market capitalization of 2.1 billion euros, and S Immo own mostly commercial property across eastern Europe. The pandemic crimped interest in the firms’ retail, office and hotel properties as it forced consumers around the world to shelter in place and many employers opted to allow their staff to work from home.

Among the conditions for the transaction to go ahead, Immofinanz requires that S Immo remove a voting rights cap from its articles of association.

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