Aroundtown, founded by property tycoon Yakir Gabay in 2004, but became publicly indexed company a decade later in 2015. At its’ genesis, the company’s stock was listed on the Euronext Stock Exchange in Paris and Frankfurt’s stock exchange at a price per share of €3.2, with a market cap of €1.5 billion.
In less than 5 years, the company has since become the largest publicly listed real estate company in Germany with an estimated asset value of €28 billion.
Back in September of 2019, TLG-Immobilien purchased 15% of Aroundtown shares from Yakir Gabay for an estimated €1.5 billion euros. Immediately following the stock sale, Aroundtown main shareholders, including Avisco at 10% (controlled by Yakir Gabay), Norges Bank, Henderson, Fidelity Ams and Blackrock supported opening discussions with TLG-Immobilien to merge assets and executive management into Aroundtown.
Amir Dayan, the main shareholder of TLG-Immobilien, was the first to express support for the TLG-Aroundtown merger by signing an agreement that would convert his 28% share into newly issued Aroundtown post-merger stocks.
Following the voluntary public takeover merger offer announced on December 18th, 2019, Aroundtown SA announced last month an acceptance rate of 77.5%, which included all TLG shares. The immediate result for Aroundtown meant creating the leading real estate force in the pan-European regions which own and manage hotel, office and residential properties.
Besides Aroundtown’s existing stock holdings, the total post-settlement closed on February 19th, 2020 of TLG is 77.8%. Existing shareholders of TLG stock received 3.6 Aroundtown shares (€27.66 per TLG share) equal to a 3.2% premium.
Such a high acceptance rate amongst investors and management comes as the two real estate giants recognized the potential of combining property and management interests.
The complimentary portfolios from the two real estate conglomerates are expected to expand existing operations and develop new opportunities. Insiders close to the deal claim Germany and the Netherlands will represent high profile locations, focusing on assets in Berlin, Munich, Frankfurt, Hamburg, and Amsterdam.
Within five years of the merger, Aroundtown is aiming to achieve annual operational/financial synergies that will amount to the same value of pre-tax funds from operations (FFO) rising from €110m to €139m.
The final decisions regarding the management body are expected to be announced in the near future. Meanwhile, both Klaus Kragel (TLC supervisory board member) and Barak Bar-Hen (CEO of TLG) have been since nominated by TLG for the new Aroundtown management body to ensure Aroundtown’s leadership role over Europe’s real estate market.