Vonovia tops Starwood with US$1.1bil Victoria Park bid

BERLIN: Vonovia SE offered to buy Swedish real estate company Victoria Park AB for about 9.56 billion kronor (US$1.1bil), topping a bid by Starwood Capital Group.

The German landlord is pushing to expand further outside its home market after completing its biggest cross-border deal in March. Victoria Park recommended accepting the Vonovia bid, which is 800 million kronor higher than Starwood’s.

“We’re looking in more detail at three or four markets, which are Sweden the Netherlands and France and Spain,” chief financial officer Stefan Kirsten said in a Bloomberg TV interview. “This was the first opportunity which arose in a palatable way from a commercial point of view for us.”

The deal comes almost two months after Vonovia succeeded in purchasing Austria’s Buwog AG for about US$4bil.

The Bochum-based landlord has doubled the number of homes it owns since a 2013 initial public offering.

Victoria Park rose as much as 7.6% in Stockholm trading and was priced at 38 kronor. That’s equal to Vonovia’s cash offer for the company’s common shares and the highest value since 2014.

Germany’s 10-year property boom has helped turn Vonovia into one of Europe’s biggest residential landlords, with a market value of more than 20 billion euros (US$24bil). The company currently has about 394,000 apartments, most of which are in Germany.

Vonovia is increasingly looking to the rest of Europe for growth as German properties become more expensive and big portfolios rarely come onto the market. In October, Vonovia forged an agreement with a unit of France’s Caisse des Depots to look at opportunities for cross-border investment.

Vonovia offered 38 kronor in cash for each Victoria Park Class A and Class B share, and 316 kronor for each preference share.

The bid is fully financed by a bridge-loan facility and Vonovia will seek to raise about one billion euros in the equity markets to help pay for the deal, according to the German company.

Shareholders representing 37.31% of voting rights in Victoria Park have accepted the offer or issued binding call options to Vonovia’s acquisition company, according to yesterday’s statement.

In a separate statement, Victoria Park recommended Vonovia’s offer and told shareholders not to accept Starwood’s bid.

Starwood offered about US$1bil in cash for Victoria Park, valuing the Swedish company at about 8.68 billion kronor.

It said in April that investors representing 22% of the shares and 31.5% of the voting rights had accepted its bid. — Bloomberg