Vonovia pounces on Adler stake after enforcing margin call

German residential landlord Vonovia has become the largest single shareholder in local peer Adler, after the latter group's largest shareholder allegedly breached the terms of a loan.

The latest in a series of setbacks for struggling Adler triggered a margin call at Aggregate Holdings, allowing Vonovia to step in and snap up a 20.5% stake in Adler.

Aggregate's exit is likely to compound Adler's problems, just months after short-seller Viceroy Research published a damning report that pushed down shares and raised concerns over Adler's financial future. Following this, Vonovia agreed a €250 mln loan with Aggregate.

However, Adler's recent announcement that a KPGM report analysing the Viceroy findings would delay full-year results, and the resignation of a long-standing board member pushed share prices close to a record low, less than €10 per share. This in turn, according to Vonovia, triggered the loan breach, as 'the shares had been pledged as collateral for a loan that Vonovia had granted to Aggregate'.

Aggregate hit back against the allegations that it had breached loan conditions, and said it was evaluating legal implications. In a statement the firm said that 'it does not believe that this specific event constitutes a cross-default in the Aggregate 2025 bonds, as the Adler shares were not held in a material subsidiary."

The outcome depends on anti-trust clearance. Vonovia clarified in any case that it 'retains all options, including the full or partial sale of the shares'.


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