IVG Immobilien: Takeover rumours

According to an article in German magazine Wirtschaftswoche (www.wiwo.de), Mr Dieter Vogel (recently appointed Chairman of the Supervisory Board of WCM) expects Austrian property company Immofinanz to come up with a takeover offer for the 52% stake Sirius holds in IVG Immobilien (IVG). In a press release WCM sent out Thurday morning, Mr Vogel commented he isn´t in talks with Immofinanz on the stake and has not spoken with Wirtschaftswoche.

In yesterday morning´s press release, he was quoted saying: ´The statement in Wirtschaftswoche that I am expecting a purchase offer from Immofinanz AG for the WCM stake in IVG is pure invention´, and additionally ´I have spoken on the subject neither to Wirtschaftswoche nor to Immofinanz AG, a company which is completely unknown to me´. Furthermore, the press release stated that negotiations on company disposals were the sole responsibility of the WCM Management Board. But this company body had also not developed any acitivities in the matter stated.

Wednesday ´s article suggests that Immofinanz may offer € 20.50 - 11.00 per share for the stake in IVG. Kempen spoke to the management of Immofinanz that neither confirmed nor denied the current rumours. If the rumours would be true, Immofinanz would acquire 52% of the shares in IVG from the Sirius banks (headed by HSH Nordbank) by the end of this month, Immofinanz will have to make a full bid for the remaining shares of IVG. Interested parties in the stake in IVG have been asked to bring forward their bids before the end of 24 October 2003. Kempen expects that break-even share price for the Sirius banks will be around the € 10 per share level. If these rumours would turn out to be true, Kempen expects that the IVG management will be more open to the interest coming from Immofinanz than from for instance US investors that are presumably more thinking of a break-up scenario for IVG. Although other parties are named to be also interested in IVG, Kempen expects Immofinanz to be one of the preferred bidders.

Kempen estimates the spot NNAV of IVG to be € 12.28 (at Wednesday´s closing price of € 9.26 implying a discount of 25%), and have a Neutral rating on the stock. Immofinanz is rated Neutral as well, and Kempen’s price target amounts to € 6.50 per share. Its current spot NAV is estimated at € 6.20 per share. Tuesday, Immofinanz finalised a rights issue bringing in an additional € 201m of equity (1:5 rights issue resulting in 33.6 million new shares at € 6 per share, implying a discount of 3% to the current share price and estimated spot NNAV). As the deadline for parties interested in the stake in IVG ends today, Kempen expects more news to come in the near future.

Source: Kempen & Co

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