German listed residential landlord Vonovia has launched a €900 mln offer for Swedish peer Victoria Park as part of plans to expand across Europe.
Vonovia, which has recently entered both Austria and France, is offering SEK 38.00 for every Class A and Class B Victoria Park share, representing a total investment of nearly €900 mln and valuing Victoria Park at SEK 17.8 bn (equivalent to €1.7 bn).
The offer represents a 12% premium to Starwood's earlier SEK 34.00 bid, or a total investment of €810 mln.
Victoria Park's independent bid committee is recommending shareholders to accept the offer, which runs until 18 June. Shareholders holding around 32% of Victoria Park's shares and including a large part of the company's management board have already committed to tender their shares or issued binding call options to Vonovia’s acquisition company.
Victoria Park owns 1 million m2 of residential space in Sweden comprising 13,700 flats.
'We are very excited about entering the Swedish market for the first time, and we are particularly happy that we identified Victoria Park as a company that follows the same business principles,' said Rolf Buch, CEO of Vonovia. 'When we were made aware of the situation by Victoria Park’s financial adviser and we started to consider an amicable offer to Victoria Park’s shareholders, we realized that the company’s management is like-minded, and we share the same business philosophy – strong investment in housing for the long-term benefit of tenants.'
The bid is fully financed by a bridge-loan facility provided by JP Morgan and Vonovia will seek to raise about €1 bn in the equity markets to help pay for the deal, the German company said.
The move is part of Vonovia's plans to grow abroad and particularly in France, Sweden and The Netherlands, which has identified as the most attractive markets.
Two months ago the company succeeded in purchasing Austria’s Buwog for about €3.3 bn. In October last year it signed an agreement with a unit of France’s Caisse des Depots to look at opportunities in the French market.