News Article Austria CEE Immofinanz investment report S Immo takeover
by Property Forum | Report

In a statement, the Management Board and Supervisory Board of S Immo have clearly expressed their opposition to the takeover offer by Immofinanz published in mid-May 2021.

"The Management Board clearly rejects the offer by Immofinanz. It is unattractive as it does neither take into account the current EPRA NAV, nor the expected increase in the intrinsic value of S Immo", explains Dr. Bruno Ettenauer, CEO of S Immo. When acquiring the S Immo share package in 2018, Immofinanz had paid a premium of 15 % on the then ERPA NAV. "The shareholders of S Immo are now – three years later – also entitled to a price that corresponds to the value of the share. The price offered is far off in this respect", Ettenauer continues his argument.

The Management Board of S Immo sees a clear upward trend for the company and a return to growth and earnings strength at pre-crisis levels due to the easing of the Corona restrictions and reinforced by the positive earnings development in the first quarter of 2021. Reference should also be made to the value analysis carried out in April 2021 for the Austrian and German portfolio, which suggests an increase in value of approximately €85 million. Remarkably, according to its report for Q1 2021 published on 31 May 2021, Immofinanz shows the S Immo shares at €23.58 per share in its balance sheet. "Thus, Immofinanz is not even granting S Immo’s shareholders the price at which it carries S Immo in its books itself", Ettenauer further explains.

Stand-alone scenario very attractive for S Immo

In the event that the takeover bid fails, the Management Board of S Immo already has concrete and clearly focused plans for S Immo. "S Immo is profitable and viable on its own. We are striving for the unbundling of the companies and plan to sell our holdings in Immofinanz and CA Immo. The proceeds are to be reinvested into our core business. S Immo is thus following a strategy aimed at value growth through development in Germany and attractive cash flows from the CEE markets. This way, we create value in the interest of our shareholders and are in a position to continue paying proper dividends. Against this background, the offer of Immofinanz is not attractive and clearly inferior to a stand-alone scenario", Ettenauer explains.

Settlement not in line with customs of the market

Due to the structure of the offer, S Immo was required to convene an extraordinary general meeting for 24 June 2021, at which, at the request of Immofinanz, a decision is to be made on the abortion of the voting rights restriction in the company's articles of association. The general meeting is thus taking place at a time when it is not yet clear whether the majority of shareholders will have accepted the takeover offer at all. Bruno Ettenauer reaffirms his earlier criticism of this procedure: "The procedure specified in the takeover offer does not follow economically logical practice. Our shareholders are exposed to substantial legal risks under this offer. We, therefore, recommend that our shareholders vote against the abortion of the voting rights restriction."

Valuation for the first half of 2021

Regardless of the resolution of the Extraordinary General Meeting, the Management Board and the Supervisory Board recommend that shareholders wait until the results of the revaluation of the property portfolio for the first half of 2021 are published before deciding whether to accept the offer. The Management Board will carry out a regular external comprehensive valuation of the entire property portfolio, the results of which will be announced after 30 June 2021 in a timely manner, in any case still within the remaining acceptance period of the offer (16 July 2021).