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Deutsche Wohnen:Minority shareholder buyout (DPLTA): Difference between revisions
Deutsche Wohnen:Minority shareholder buyout (DPLTA) (view source)
Revision as of 16:08, 25 September 2024
, 25 September 2024→How Does DPLTA Works?
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== How Does DPLTA Works? == | == How Does DPLTA Works? == | ||
* A | * A domination agreement can initiated by a company once it achieves 75% voting rights (which Vonovia exceeds)<ref name=":1">https://www.pplaw.com/sites/default/files/2020-07/wg-en-2012-squeeze-outs.pdf</ref>. | ||
* The price offered is usually the greater of fair value, weighted price in the past three months preceding domination announcement or price offered to other shareholders in the last six months<ref name=":2">https://www.specialsituationinvestments.com/2020/01/adler-real-estate-adl-de-merger-arbitrage-10-upside/</ref>. | * The price offered is usually the greater of fair value, weighted price in the past three months preceding domination announcement or price offered to other shareholders in the last six months<ref name=":2">https://www.specialsituationinvestments.com/2020/01/adler-real-estate-adl-de-merger-arbitrage-10-upside/</ref>. | ||
* The dividend to be paid is calculated based on the company's historical earnings and future earnings prospects. A Federal Court of Justice recently concluded that the market value of a company can be used to determine the guaranteed dividend<ref name=":2" />. | * The dividend to be paid is calculated based on the company's historical earnings and future earnings prospects. A Federal Court of Justice recently concluded that the market value of a company can be used to determine the guaranteed dividend<ref name=":2" />. | ||
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* During the appraisal period, the external shareholders continue to hold the shares and receive a dividend. Eventually, if the court decides that the compensation was not fair, the shareholders receive the difference plus interest of between 0.88% and 5% as at 2019. The court's compensation is usually not less than that offered by the acquiring company <ref name=":2" />. | * During the appraisal period, the external shareholders continue to hold the shares and receive a dividend. Eventually, if the court decides that the compensation was not fair, the shareholders receive the difference plus interest of between 0.88% and 5% as at 2019. The court's compensation is usually not less than that offered by the acquiring company <ref name=":2" />. | ||
* The guaranteed dividend has generally been at least 5%<ref>https://www.reuters.com/article/us-germany-regulation-breakingviews/breakingviews-germanys-takeover-rules-are-more-sm-than-ma-idUSKBN1X7112/</ref>. | * The guaranteed dividend has generally been at least 5%<ref>https://www.reuters.com/article/us-germany-regulation-breakingviews/breakingviews-germanys-takeover-rules-are-more-sm-than-ma-idUSKBN1X7112/</ref>. | ||
* On the other hand, profit and loss transfer agreement (PLTA) leads to creation of a relationship called ''Organschaft.'' Here the profits and losses are only pooled at the controlling shareholder level. Also, the subsidiary is only subject to tax on payments made to outside shareholders. The PLTA needs to be completed for at least five years<ref>https://taxsummaries.pwc.com/germany/corporate/group-taxation#:~:text=If%20a%20parent%20holds%20more,of%20at%20least%20five%20years.</ref>. PLTA is exempted from real estate tax (RETT) as long as the shares holdings of Vonovia doesn't grow to 90%<ref>https://www.roedl.com/insights/MA-Dialog/2024-02/grestg-new-gold-standard-real-estate-transfer-tax-structures</ref>. | |||
== What Happens If Some Shareholders Don't Take Part in DPLTA? == | == What Happens If Some Shareholders Don't Take Part in DPLTA? == | ||