Shareholders in Vienna-based real estate group S Immo have rejected a change to their voting rights that was a condition for rival Immofinanz’s €1.14 bn takeover bid, the company announced this week.
S Immo said shareholders, with a turnout of almost 55%, rejected the elimination of maximum voting rights at an annual general meeting Immofinanz had called the ‘last chance’ for the merger to happen.
The maximum voting rights rule, introduced in 2006, stipulates that no shareholder can hold more than 15% of voting rights even if they own a higher percentage of shares.
Immofinanz currently holds a 26.5% stake in S Immo.
Immofinanz said it would make a decision on the takeover offer in a ‘timely manner’.
Vienna- and Warsaw-listed Immofinanz in March raised its voluntary takeover offer for the Austrian peer by 23% to €22.25 per share, representing a 40% premium to the average share price of S Immo over the last six months. But S Immo CEO Bruno Ettanauer continues to believe that the bid is too low.
‘The offer is unattractive as it does neither take into account the current EPRA NAV, nor the expected increase in the intrinsic value of S Immo,’ he recently said, noting that when Immofinanz bought the S Immo share package in 2018, it paid a premium of 15% on the then EPRA 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.’
Immofinanz initially announced plans to a launch a public offer for S Immo with a price of €18.04 per share. Analysts were quick to decry the bid, with SRC Research calling the offer price 'very low'. S Immo in fact has a much higher EPRA NAV per share, estimated at close to €24 based on 2020 figures.
An attempted merger between the two firms already hit a roadblock in 2019 after the two firms failed to agree on a share exchange ratio. S Immo holds a 12% stake in Immofinanz and a 6% stake in CA Immo, the latter of which was the subject of a failed Immofinanz takeover bid in 2018.
CA Immo's fortunes are relevant to the S Immo takeover bid, due to the current actions of Aggregate Holdings, owned by Austrian investor Günther Walcher, which is believed to be sparring with Starwood in a contest to acquire CA Immo.
Current Immofinanz CEO Ronny Pecik, who signed an agreement at the end of February to step down from the helm of the firm, also agreed to sell his 10.56% stake in Immofinanz to a vehicle controlled by Aggregate. He also holds a roughly 14% stake in S Immo, with partner Nobert Ketterer. Aggregate in turn recently increased its minority holding in S Immo to 10.79% in February.
Market watchers believe the trio of CEE-focused Austrian firms could eventually head towards a three-way merger, whatever the outcome of the most recent bids.
Immofinanz’s offer for S Immo is being financed from existing cash resources as well as a new debt financing facility in the amount of €500 mln.