Frankfurt, Dusseldorf The real estate group Adler Group has – at least on paper – a new major shareholder: The housing group Vonovia now holds 20.5 percent of the shares in the SDax company, as Vonovia announced on Tuesday morning.
The block of shares fell to Vonovia through the realization of a pledge. Vonovia had granted a loan to the Luxembourg major shareholder Aggregate Holding. In return, Vonovia received a lien on Aggregate’s block of shares. The amount is based on the loan of around EUR 250 million and the current share price.
In addition, the parties agreed on a purchase option at EUR 14 per share, which the Group could exercise over the next 18 months. When Adler’s share price slipped below the agreed price threshold, Aggregate would have had to post additional cash protection.
Aggregate was informed of this, but had not provided the “contractually provided cash security,” Vonovia explained. That is why the block of shares was transferred. This serves “to safeguard Vonovia’s financial interests”.
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Before you can use this, however, the Cartel Office must approve the process. Therefore, one has de facto no access to the shares and has to wait before taking further steps, such as selling or exercising voting rights. The decision as to what will happen to the block of shares “is still completely open,” emphasized a company spokeswoman on request. As early as last November, Vonovia boss Rolf Buch had not ruled out striving for a majority takeover.
More about the Adler Group:
Meanwhile, Vonovia encountered a lack of understanding and resistance from Aggregate: “Vonovia’s actions contradict a clear agreement between Aggregate and Vonovia that the loan to cover the Adler shares was a strategic loan,” the investor admitted announce a message.
The company is now reviewing the legal ramifications of Vonovia’s actions, but doesn’t think the move means a default on Aggregate’s 2025 bonds. The reason for this is that the Adler shares were not held in any “significant subsidiary”. Aggregate is now reconsidering its position.
By investing in Adler, Vonovia would further expand its position in Germany. The Bochum-based Dax group recently took over Germany’s second-largest landlord, Deutsche Wohnen. This created a real estate giant with around 568,000 apartments, mostly in Germany. This made Vonovia number one in all of Europe.
Adler, on the other hand, is fighting against a short seller attack. Last fall, short seller Fraser Perring accused the company of fraud, manipulation and deception – allegations Adler denies. So far, however, it has not been possible to definitively refute the allegations.
Adler’s new supervisor is well known at Vonovia
The incident caused the SDax company’s share price to crash. Adler had hired special auditors from KPMG. Because their investigation is ongoing, Adler recently had to postpone the presentation of the 2021 annual financial statements.
Last week, former Vonovia board member Stefan Kirsten was appointed the new head of the real estate investor’s board of directors. When he took office, he said that Adler was “a difficult case” but “certainly not hopeless from his previous external perspective”.
But Kirsten emphasized that Adler first had to regain the confidence of the markets. “The elephant in the room is called Wirecard,” he said. The insolvent payment service provider has cost Germany as a financial center and the local companies a lot of credibility. “We have to fight against this fact.”
Apparently Vonovia also wants to contribute to this. In a presentation listing arguments for redeeming the deposit, it said: “Vonovia can influence the improvement of Adler’s corporate governance structures – even before the KPMG forensic report.”
Only after its completion will Vonovia then consider what should happen to the new block of shares: “We’ll wait for the publication of the KPMG report before we decide,” said the company spokeswoman.
Vonovia’s move gives investors hope for better times. The Adler share rose sharply and was quoted at midday with an increase of almost twelve percent at 11.42 euros.
More: An industry veteran strengthens the real estate group Adler.