European Event-Driven Analyst

Jesus Rodriguez Aguilar

Jesús is an Insight Provider (Event-driven) on the Smartkarma network, where he looks across sectors at opportunities arising from securities mispricing (both credit and equity), share classes, bid announcements, prospective bids, and special situations. He has served as Economic and Business Advisor at the Spanish Congress in Madrid. Prior to that, he has worked in the City of London: as a Credit Analyst at Bloomberg; Event-driven associate at former boutique European Research; and doubled as Special Situations and Equity-linked VP (convertible bonds) at Merrill Lynch. Jesús has an MBA from the London Business School, a BA (Hons.) degree in Economics from the Complutense University in Madrid, and a BA (Hons.) in Law from U.N.E.D., also in Madrid.

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Vonovia/Deutsche Wohnen: Update and Change of Recommendation

Event-Driven

<a href="https://www.smartkarma.com/entities/vonovia-se" target="_blank" data-smartkarma-citation="entities:21736:1" rel="noopener">Vonovia SE (VNA GR)</a> had failed to secure what was its second takeover attempt for <a href="https://www.smartkarma.com/entities/deutsche-wohnen-ag" target="_blank" data-smartkarma-citation="entities:21126:1" rel="noopener">Deutsche Wohnen AG (DWNI GR)</a>, at an adjusted €52/share, with some shareholders declining to tender their shares on a view that the offer undervalued Deutsche Wohnen.
On 1 August 2021, <a href="https://en.vonovia-st.de/download/companies/ma1056/1056_02adhoc/20210801_adhoc_en.pdf" target="_blank" rel="noopener">Vonovia SE entered into a new agreement with Deutsche Wohnen</a>, to launch another voluntary public takeover offer for an increased cash consideration of €53/share.
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A new public takeover offer and the publication of a decision to launch such an offer by a bidder pursuant are not permitted for one year following the end of the acceptance period, unless the target consents and the BaFin waives the blocking period, with such a waiver seen as little more than a formality.
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<li>
Vonovia states that "the decision whether to grant the waiver from the blocking period is at the discretion of BaFin and is expected in the upcoming week".
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Exclusion of a domination and/or profit and loss transfer agreement for a period of three years from 1 August (date of the conclusion of the business combination agreement).
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</ul>
The new offer represents a 2.9% FFO yield. An offer at a significantly higher price was not to be expected, at least in the short term, as it would exceed Deutsche Wohnen's NAV (€52.5/share) and EPRA NNNAV (€ 52.8/share) and value generation by Vonovia would be doubtful.
The deal is highly likely to close now. A gross spread of 0.4% (under 1% annualized) means there are better opportunities elsewhere.

Vonovia SE (VNA GR) had failed to secure what was its second takeover attempt for Deutsche Wohnen AG (DWNI GR), at an adjusted €52/share, with some shareholders declining to tender their shares on a view that the offer undervalued Deutsche Wohnen.
On 1 August 2021, Vonovia SE entered into a new agreement with Deutsche Wohnen, to launch another voluntary public takeover offer for an increased cash consideration of €53/share.


A new public takeover offer and the publication of a decision to launch such an offer by a bidder pursuant are not permitted for one year following the end of the acceptance period, unless the target consents and the BaFin waives the blocking period, with such a waiver seen as little more than a formality.


Vonovia states that "the decision whether to grant the waiver from the blocking period is at the discretion of BaFin and is expected in the upcoming week".


Exclusion of a domination and/or profit and loss transfer agreement for a period of three years from 1 August (date of the conclusion of the business combination agreement).


The new offer represents a 2.9% FFO yield. An offer at a significantly higher price was not to be expected, at least in the short term, as it would exceed Deutsche Wohnen's NAV (€52.5/share) and EPRA NNNAV (€ 52.8/share) and value generation by Vonovia would be doubtful.
The deal is highly likely to close now. A gross spread of 0.4% (under 1% annualized) means there are better opportunities elsewhere.

Vonovia/Deutsche Wohnen: Third Time Around