Vienna, 18 December 2017

BUWOG AG and Vonovia SE sign Business Combination Agreement - Management Board and Supervisory Board of BUWOG support the announced takeover offer by Vonovia
 

- BUWOG shareholders to receive EUR 29.05 in cash per BUWOG share, a premium of 18.1 percent on the closing price of the BUWOG shares of 15 December 2017.

- Daniel Riedl, CEO of BUWOG AG: "With regard to the business models and portfolios, a merger between BUWOG and Vonovia offers a strategic advantage for both companies. The value and the growth prospects of our attractive portfolio as well as our strong position in the development sector are adequately reflected in the current offer. Subject to the legal and substantial examination of the offer document, we will therefore recommend to our shareholders to accept the offer."

- Rolf Buch, CEO of Vonovia SE: "BUWOG is an excellent fit with our company: the housing stocks complement each other perfectly - in Germany and Austria. With the merger, Austria would become a sustainable part of our apartment portfolio. We furthermore strengthen our business model with the successful development business of BUWOG."

- The companies have signed a Business Combination Agreement: BUWOG organization will lead the Austria business within the Vonovia group; development segment will strengthen the business model of Vonovia as an independent business area.

The Management Board of BUWOG AG have today signed a Business Combination Agreement together with the Management Board of Vonovia SE for the merger of the two companies. On this basis, Vonovia intends to make a voluntary public takeover offer for all outstanding shares of BUWOG. Shareholders are to be offered EUR 29.05 in cash per BUWOG share.

This cash offer values BUWOG at around EUR 5.2 bn (enterprise value), taking into account possible shares from the conversion of convertible bonds issued by BUWOG. Subject to the legally required examination of the offer document to be published, the Management Board and Supervisory Board of BUWOG AG have a positive stance towards the offer.

The aim is to merge BUWOG's housing stock (around 49,000 apartments) with Vonovia's housing stock (around 350,000 apartments). Around 55 percent of apartments owned by BUWOG are located in Germany, for example in the dynamically growing cities of Berlin and Hamburg. BUWOG's apartments in Austria are located at its Vienna base as well as mostly in regional centres such as Graz, Klagenfurt, Salzburg and Villach. After the planned integration of the Austrian real estate portfolio of the former conwert into the real estate management of BUWOG, Austria would become a sustainable part of Vonovia's residential portfolio with around 24,000 apartments. The BUWOG organization would thereby lead the entire Austrian business of the Vonovia group.

Daniel Riedl, CEO of BUWOG AG, says: "With regard to business models and portfolios, a merger between BUWOG and Vonovia offers a strategic advantage for both companies. The value and the growth prospects of our attractive portfolio as well as our strong position in the development sector are adequately reflected in the current offer. Subject to the legal and substantial examination of the offer document, we will recommend to our shareholders to accept the offer."

Rolf Buch, CEO of Vonovia SE, says: "We are very pleased that our proposal has been positively received by the boards of BUWOG. BUWOG is an excellent fit for our company: the housing stocks complement each other perfectly in Germany and Austria. With the merger, Austria would become a sustainable part of our apartment portfolio. We furthermore strengthen our business model with the successful Development business of BUWOG."

Vonovia's planned offer of EUR 29.05 per BUWOG share represents a premium of 18.1 percent on the closing price of Friday, 15 December 2017 and a premium of 15.7 percent above the volume-weighted average share price of BUWOG over the past six months prior to this announcement, in each case based on the share price of BUWOG shares in official trading on the Prime Market (Amtlicher Handel) of the Vienna Stock Exchange.

Vonovia's offer will also be addressed to the holders of BUWOG's convertible bonds. Vonovia SE intends to offer EUR 115,753.65 in cash for each convertible bond with a nominal value of EUR 100,000 during the initial acceptance period and, in accordance with market practice, a reduced offer price per convertible bond during the three-months additional acceptance period.

It is intended that Daniel Riedl, CEO of BUWOG, will as a new Member of the Management Board of Vonovia assume responsibility for the Austrian business as well as the entire development business area. It is also intended that Herwig Teufelsdorfer, the COO of BUWOG, will continue to lead the operational business in Austria and Andreas Segal, Deputy CEO and CFO, will have a key role in the implementation of the transaction before leaving in the second half of 2018. The Chairman of the Supervisory Board of BUWOG, Mr Vitus Eckert, is expected to be proposed as a candidate for the Supervisory Board at the Vonovia annual general meeting in the case of a successful offer.

In the future, the Group will lead the Austrian business from its new BUWOG headquarters at Rathausstrasse 1 in Vienna. Thereby, the Austrian real estate portfolio of the former conwert will also be integrated into the real estate management of BUWOG. The location in Berlin will continue to lead the successful development business as an independent business area within the Vonovia group.

The CEO of BUWOG, Mr Daniel Riedl, and the Chairman of the Supervisory Board, Mr Vitus Eckert, support the offer by Vonovia subject to the legal and substantial examination of the offer document to be published and intend to accept Vonovia's offer and to tender all of the BUWOG shares held by them.

Five of the six Supervisory Board members of BUWOG appointed at the annual general meeting have declared that they will resign their office upon successful takeover, and at Vonovia's request, BUWOG will convene an extraordinary general meeting to replace the Supervisory Board. With a successfully completed takeover, Vonovia will be given the opportunity to appoint new members to the Supervisory Board.

The completion of the takeover offer will be subject to the statutory minimum acceptance threshold of 50% plus 1 share of all BUWOG shares that are subject of the offer, antitrust approval in Germany and Austria as well as other customary closing conditions, the details of which will be set out in the offer document.

After publication of Vonovia's official offer document, which is expected at the start of February 2018, the Management Board and Supervisory Board of BUWOG will examine the document carefully in compliance with their statutory obligations. After that, they will publish a detailed reasoned opinion.

Goldman Sachs acts as sole financial advisor to BUWOG, Schoenherr Rechtsanwaelte act as legal advisors to the company.

 

About the BUWOG Group

The BUWOG Group is the leading German-Austrian full-service provider in the residential property business and now looks back on 66 years of expertise. Its property portfolio encompasses more than 49,200 units and is located in Germany and Austria. In addition to Asset Management, the entire value chain of the residential sector is covered by Property Sales and Property Development. The shares of BUWOG AG have been listed on the stock exchanges in Frankfurt am Main, Vienna (ATX) and Warsaw since the end of April 2014.

 

 

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