Deutsche Wohnen:Minority shareholder buyout (DPLTA): Difference between revisions

If Vonovia doesn’t provide an attractive compensation, Elliot Investment (which has 3% stake) will probably hold on to its shares. This will be a constant headache for Vonovia whenever it wants to borrow funds from Deutsche Wohnen as seen in the [https://www.reuters.com/business/elliott-seeks-investigation-into-loan-by-deutsche-wohnen-vonovia-2023-05-22/ past]. I also assume that Vonovia wants to exert control over Deutsche Wohnen’s cash before a turnaround in German real estate sector fully materializes. This should improve their ability to borrow, which would lead to less pressure to sell property and allow them to seize buying/development opportunities if they arise. Furthermore, a good/fast takeover will clear one major time-consuming issue for management and there will be less expenses for having duplicated functions in accounting, investor reporting etc. and all remaining synergies from the merger can be realized.

According to insights<ref>https://forum.investmentwiki.org/t/german-real-estate-market/150/13</ref>, the German real estate sector is beginning to stabilize. This will likely boost real estate shares in the near future. As such, Vonovia will likely offer an attractive offer in order to avoid squeezing out minority shareholders in future at a higher price.