International law firm Bird & Bird has been advising Aareal Bank AG in the sale of its majority stake in Immobilien Scout GmbH. A team of Bird & Bird corporate lawyers based in Frankfurt and led by partner Dr Erich Michel, advised on the deal.
As part of the deal itself, Aareal Bank AG sold its 66.22% stake in Immobilien Scout GmbH, Berlin, to a consortium consisting of Macquarie Bank Ltd, Sydney, and Publishing and Broadcasting Ltd, Sydney. The purchase price values Immobilien Scout GmbH, the market leader amongst property internet portals in Germany, at €540 million.
This non-recurring effect will increase the consolidated net income after minority interests by approx. €140 million. Additionally, retained earnings in accordance with IFRS will be increased by around €14 million. As as result of the deal, the bank has raised its previous target of net return on equity after taxes in excess of 13% for the 2007 financial year to more than 20%.
Within the scope of realigning its group structure, to focus on the core business segments of Structured Property Financing and Consulting/Services to the institutional housing sector, Aareal Bank AG had indicated that it would examine strategic options regarding its shareholding in Immobilien Scout.
“By increasing our stake back in April, we built the foundation for maximising the value of the stake held in Immobilien Scout for Aareal Bank AG”, said Dr. Wolf Schumacher, Chairman of the Management Board of Aareal Bank AG. “The successful sale will generate additional capital which we will then be able to invest in further developing our core businesses.”
“In fact, this process began in our early years where we sold non-strategic participations in order to concentrate on the further development of our core business. In this context, the ImmoScout-Transaction is a further important step of focussing our business”, added Hermann J. Merkens, member of the Management Board of Aareal Bank AG.
The co-shareholder in Immobilien Scout GmbH, Scout24 AG, which belongs to the Deutsche Telekom Group has a pre-emptive right. Furthermore, the transfer of the share is subject to the approval of the supervisory board of Immobilien Scout GmbH. This is considered in the purchase agreement in a way resulting in no disadvantages for Aareal Bank AG. Furthermore, the sale to the consortium is subject to approval by the German Federal Cartel Office in Berlin. The closing of the transaction is scheduled by the end of the 2007 financial year, at which time the sales proceeds will be recognised.
Aareal Bank AG had acquired an additional stake of approx. 24% in the capital of Immobilien Scout GmbH from private equity investors in April 2007, raising its total stake to approx. 54% at that time. The bank subsequently raised its shareholding to 66.22% through additional purchases.
The Bird & Bird team consisted of corporate partner Dr. Erich Michel LL.M. who led the deal, corporate associates, Dr. Stefan Kleinbreuer, Dr. Oliver Lorenz and Kai Kerger, employment/company pension schemes lawyer, Lutz Hoheisel and anti-trust specialist Prof. Dr. Frank Immenga. The same team also represented Aareal Bank AG in April earlier this year, on their acquisition of a stake of approx. 24% in the capital of Immobilien Scout GmbH of Private Equity Investors.
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