German real estate company TLG Immobilien is considering a potential merger with rival Aroundtown SA (AT1.DE) after buying a stake of nearly 10% in the firm for around €1.02bn (£930m).
TLG bought a 9.99% stake in Aroundtown from its largest shareholder, Avisco Group.
The purchase values the shares at €8.30 per share, a 10% premium to Aroundtown’s closing price last Friday.
Sascha Hettrich, chairman of TLG’s supervisory board, said: “We welcome working with Aroundtown towards a future merger of the two companies and creating one of the largest commercial real estate firms in Europe with a focus on top-tier cities in Germany and the Netherlands.”
Aroundtown says it has a commercial property portfolio worth €16.2bn, in addition to its exposure to the German residential market which makes up 39% of its portfolio.
The potential deal comes as the German capital prepares to freeze rents for five years after Berlin’s senate approved a draft bill for a rent freeze, or Mietendeckel, which means landlords will be blocked from increasing rent on residential properties for five years.
TLG’s largest shareholder is Israeli real estate investor Amir Dayan. His Ouram company said on Sunday that it backs the company’s supervisory board and supports the evaluation of a potential merger.
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