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Deutsche Wohnen:Minority shareholder buyout (DPLTA): Difference between revisions
Deutsche Wohnen:Minority shareholder buyout (DPLTA) (view source)
Revision as of 11:44, 26 September 2024
, 26 September 2024→Upsides and Risks To Exchange Price
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The best entry-point for Vonovia [[Deutsche Wohnen:Minority shareholder buyout (DPLTA)#What Happens If Some Shareholders Don.27t Take Part in DPLTA.3F|squeeze-out]] of Deutsche Wohnen minority shareholders would be 95% of voting rights. At 90%, it can only initiate merger squeeze-out which will need merging with Deutsche Wohnen. Since merger agreement and profit and loss agreement (PLTA) won't work hand-in-hand, general corporate squeeze-out which only requires 95% voting rights would be viable. To attain 95% voting rights, Vonovia would have to increase its shares at Deutsche Wohnen by 32 million, another reason it should offer an attractive exchange price. | The best entry-point for Vonovia [[Deutsche Wohnen:Minority shareholder buyout (DPLTA)#What Happens If Some Shareholders Don.27t Take Part in DPLTA.3F|squeeze-out]] of Deutsche Wohnen minority shareholders would be 95% of voting rights. At 90%, it can only initiate merger squeeze-out which will need merging with Deutsche Wohnen. Since merger agreement and profit and loss agreement (PLTA) won't work hand-in-hand, general corporate squeeze-out which only requires 95% voting rights would be viable. To attain 95% voting rights, Vonovia would have to increase its shares at Deutsche Wohnen by 32 million, another reason it should offer an attractive exchange price. | ||
'''''Faster resolution of squeeze-out resolution proceedings''''' | |||
The German corporate act provides for fast tracking of [[Deutsche Wohnen:Minority shareholder buyout (DPLTA)#What Happens If Some Shareholders Don.27t Take Part in DPLTA.3F|proceedings]] related to squeeze-out release procedure. This provides an incentive for Vonovia to conclude the DPLTA as soon as possible in order to proceed with the squeeze-out. | |||
=== Risks === | === Risks === | ||
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* If some shareholders fail to take part in the DPLTA, they will continue to hold their shares and be entitled to an annual guaranteed dividend<ref name=":3">https://www.mayerbrown.com/-/media/files/perspectives-events/publications/2020/03/ger-whitepaper-corporate-public-takeovers.pdf</ref>. | * If some shareholders fail to take part in the DPLTA, they will continue to hold their shares and be entitled to an annual guaranteed dividend<ref name=":3">https://www.mayerbrown.com/-/media/files/perspectives-events/publications/2020/03/ger-whitepaper-corporate-public-takeovers.pdf</ref>. | ||
* However, the acquirer (Vonovia) can in future increase its stake to between 90% and 95% and initiate a squeeze-out of the remaining shareholders. Here, the shareholders, will be forced to sell their shares for adequate compensation. A shareholder who owns at least a nominal amount of €1,000 in the target could try to delay the squeeze-out | * However, the acquirer (Vonovia) can in future increase its stake to between 90% and 95% and initiate a squeeze-out of the remaining shareholders. Here, the shareholders, will be forced to sell their shares for adequate compensation. A shareholder who owns at least a nominal amount of €1,000 in the target could try to delay the squeeze-out resolution through legal proceedings. However, the German Stock Corporation Act provides for a fast tracking of such proceedings, allowing for a resolution within three to six months. Compensation proceedings are only handled after registration of the squeeze-out<ref name=":1" />. | ||
* Squeeze-outs are in three forms. A takeover squeeze -out, a merger squeeze-out and a general corporate squeeze-out. A merger squeeze-out can be initiated by the acquirer (Vonovia) once it achieves 90% voting rights. However, it will have to merge with another corporation such as the target and initiate a squeeze-out within three months. A general corporate squeeze-out requires the acquirer to have at least 95% voting rights in the target. On the other hand, a takeover squeeze-out requires the acquirer to attain at least 95% voting rights in the target and initiate a squeeze-out within three months. The The advantage of this type of squeeze-out is that if the takeover bid was accepted by at least 90% of the shareholders, the offer price offered during the takeover can be considered as adequate compensation. All the other rules mentioned above will apply in these types of squeeze-outs<ref name=":1" />. | * Squeeze-outs are in three forms. A takeover squeeze -out, a merger squeeze-out and a general corporate squeeze-out. A merger squeeze-out can be initiated by the acquirer (Vonovia) once it achieves 90% voting rights. However, it will have to merge with another corporation such as the target and initiate a squeeze-out within three months. A general corporate squeeze-out requires the acquirer to have at least 95% voting rights in the target. On the other hand, a takeover squeeze-out requires the acquirer to attain at least 95% voting rights in the target and initiate a squeeze-out within three months. The The advantage of this type of squeeze-out is that if the takeover bid was accepted by at least 90% of the shareholders, the offer price offered during the takeover can be considered as adequate compensation. All the other rules mentioned above will apply in these types of squeeze-outs<ref name=":1" />. | ||
* Given that the Vonovia and Deutsche Wohnen have announced a profit and loss transfer agreement, it's highly unlikely that they will initiate merger squeeze-out since the two doesn't go hand in hand. | * Given that the Vonovia and Deutsche Wohnen have announced a profit and loss transfer agreement, it's highly unlikely that they will initiate merger squeeze-out since the two doesn't go hand in hand. | ||