Real estate giant Vonovia is apparently talking to its next largest rival, Deutsche Wohnen, about a takeover for the third time. This time it could offer around 19 billion euros, or 53 euros per share in cash, for Deutsche Wohnen, according to a person familiar with the matter. The talks are currently amicable and advanced, so that a deal could be announced this week, it is said from circles. However, final decisions have not yet been made and it is still not certain that the transaction will take place at all.
Spokesmen for the two companies could not be reached immediately on Whit Monday.
Together, the companies own over half a million apartments.
The shares of Deutsche Wohnen have risen by three percent this year, and the Berlin company is currently worth a good 16 billion euros.
Vonovia shares, on the other hand, lost 13 percent in the same period; the Bochum-based company is currently worth around 30 billion euros on the stock exchange, making it the number one among listed housing companies.
According to the insiders, a merger of the two mega-landlords would bring cost reductions and thus also enable political concessions in order to counteract the increasing criticism of rising rents - especially in Berlin.
Deutsche Wohnen recently benefited from the decision of the Federal Constitutional Court to tip the rent cap of the Berlin Senate in mid-April. But the criticism has not died down even after the judgment, and on the stock exchange the company is still trading below the net asset value of 52.50 euros per share.
Vonovia last made advances to her rival in February 2016, but was unable to convince her investors at the time. Deutsche Wohnen called the takeover attempt at the time hostile and not in the interests of its own shareholders. A rivalry between Vonovia boss Rolf Buch and Michael Zahn from Deutsche Wohnen also stems from this time, which would have to be resolved for a successful transaction. Vonovia brought consultants on board last year to check another bid. However, this did not happen at this point in time.
However, Jefferies analyst Thomas Rothäusler believes that Vonovia will be successful this time is very unlikely. The general election in September could create political and regulatory risks. In addition, the significantly different valuation of the two companies is unfavorable, a share swap would have a dilutive effect for Vonovia and an increase in profits is likely to be challenging. Finally, the takeover of Deutsche Wohnen Vonovia would move even more into the focus of the debate about affordable housing and expropriation in Berlin. JPMorgan analyst Neil Green also believes that Deutsche Wohnen's willingness to enter into the transaction on the basis of the rumored takeover price is limited.