German Euroshop takeover: Otto family reaches for shopping centers

German Euroshop takeover: Otto family reaches for shopping centers
Written by insideindyhomes

Status: 05/23/2022 12:23 p.m

Many may not have noticed Deutsche Euroshop AG. But their malls are popular. Now the company could probably lose its independence. Investors react euphorically.

The Otto family has made a takeover bid for the real estate group Deutsche Euroshop AG, which specializes in shopping centers. The shareholders are to be offered a total of EUR 22.50 per share, as the investment vehicle Hercules BidCo announced today. The offer price consists of EUR 21.50 per share plus EUR 1 as a dividend for the 2021 financial year.

The company’s planned annual general meeting on June 23 has been canceled and is to be convened again by the end of August. The dividend still has to be approved at the shareholders’ meeting. The Management Board and Supervisory Board of Deutsche Euroshop are in favor of accepting the offer.

The Otto family wants to push ahead with the reorganization

Behind Hercules BicCo is a joint holding company of the financial investor Oaktree and Cura, the wealth management and family office of the Otto family. With a good 20 percent, Alexander Otto is already the largest single shareholder in Deutsche Euroshop. Like its competitor ECE, the company is already part of the Otto family’s sphere of influence.

Alexander Otto is also a member of the Otto Group’s Supervisory Board, which also includes his half-brother Michael Otto. He had the group with brands like Otto, Hermes, the listed About You or Mytoys as CEO for decades.

The Otto family wants to support the ailing real estate group Deutsche Euroshop with the reorganization. The bidders are aiming for a minimum acceptance threshold of 50 percent plus one share. This includes the shares in Deutsche Euroshop, which are already controlled. The acceptance period is scheduled to begin in June and the transaction is expected to be completed in the third quarter of 2022, the bidders further announced.

Euroshop share is going up

The Euroshop share closed at EUR 15.63 on Friday. At a price of 22.50 euros, the premium is around 44 percent. After the takeover bid, the investors therefore boldly grabbed it. At times, the title rose to a peak of EUR 22.50, making it more expensive than it had been for around two years.

In January 2020, the paper was mostly still well over 25 euros, but had been severely affected by the lockdowns and restrictions on retail during the two years of the Corona crisis. Many tenants in the shopping centers closed down or had to be supported by concessions on rents. Before the pandemic, the company was also increasingly affected by online trading.

The company, which is listed in the SDAX, currently has shares in 21 shopping centers in Germany, Austria, Poland, the Czech Republic and Hungary. The portfolio includes one of the largest shopping centers in Germany, the Main-Taunus-Zentrum near Frankfurt. The Altmarkt-Galerie in Dresden and the Galeria Baltycka in Gdansk are also part of Deutsche Euroshop.

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