April 18, 2018 / 12:27 PM / a year ago

Austrian property carousel twirls as Immofinanz gets S Immo stake

VIENNA, April 18 (Reuters) - Austrian property group Immofinanz will spend 390 million euros ($483 million) to take a 29.1 percent stake in peer S Immo, extending a welter of deals in the sector as rivals scramble for position.

Immofinanz said on Wednesday it was paying 20 euros a share to buy around 14.6 million S Immo shares from investor Ronny Pecik’s RPR Group and another 4.9 million shares from Rene Benko’s Signa group.

The deal came the same day that U.S. property investment firm Starwood Capital Group launched a bid for minority stakes in CA Immo and Immofinanz as it seeks exposure to markets in central and eastern Europe.

Immofinanz said it would fund the S Immo deal with available liquidity and, if necessary, additional bank financing. The transaction was expected to close “in several months”.

“The real estate portfolio of S Immo complements the Immofinanz portfolio in the office and retail areas. The transaction is therefore expected to strengthen the market position of both companies and create synergies for the management of the properties,” it said.

“In the event of a future combination of the two companies, the increased size would lead to a stronger position on the capital market. Opportunities for the realisation of substantial synergies in financing and overhead costs would also be possible.”

In Austria stakes above 30 percent trigger a mandatory takeover offer to other shareholders.

S Immo shares extended their gains on Wednesday afternoon after the deal was announced. By 1223 GMT they were up 2.9 percent at 16.58 euros. Immofinanz shares were down 3 percent at 2.7 percent at 2.13 euros.

Immofinanz already owns 26 percent of another rival, CA Immo. It said in February it was considering selling that stake after it effectively abandoned its plan to take over the company.

“The situation with regard to Immofinanz’s investment in CA Immo remains unchanged,” it said, adding it was evaluating strategic options. ($1 = 0.8075 euros) (Reporting by Michael Shields and Alexandra Schwarz-Goerlich editing by Francois Murphy)

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