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ADLER Real Estate AG: Agreement signed to purchase 41.04% stake in Brack Capital Properties N.V. and public tender offer announced

ADLER Real Estate AG / Key word(s): Takeover/Offer
ADLER Real Estate AG: Agreement signed to purchase 41.04% stake in Brack Capital Properties N.V. and public tender offer announced

17-Feb-2018 / 00:00 CET/CEST
Disclosure of an inside information acc. to Article 17 MAR of the Regulation (EU) No 596/2014, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.


Publication of Inside Information pursuant to Article 17 of the Market Abuse Regulation

ADLER Real Estate AG: Agreement signed to purchase 41.04% stake in Brack Capital Properties N.V. and public tender offer announced

- ADLER Real Estate AG ("ADLER") signs agreement to purchase 41.04% stake in Brack Capital Properties N.V. and announces intention to launch a public tender offer for the acquisition of up to 25.8% additional shares.

- With commitments from Management of Brack Capital Properties N.V. to tender or sell their shares, ADLER is targeting a stake of up to 70% plus one share.

- ADLER to offer all shareholders 440 ILS (New Israeli Shekel) per share in Brack Capital Properties N.V. for a total consideration of c. ILS 2.4 billion (c. EUR 539 million).

- Transaction to be financed from existing available funds, proceeds from the recent sale of ACCENTRO Real Estate AG, the sale of non-core assets for a total of c. EUR 350 million as well as an acquisition bridge loan facility.

- Expansion of ADLER's residential portfolio by c. 11,000 units (c. 21% growth by units) in 'A' locations across Germany.

Berlin, 16 February 2018. ADLER Real Estate AG ("ADLER") entered into a share purchase agreement with Redzone Empire Holding Limited ("Redzone") today for the acquisition of a 41.04% stake in Brack Capital Properties N.V. ("BCP"), a public limited liability company incorporated under the laws of the Netherlands, the shares of which are admitted to trading on the Tel Aviv Stock Exchange (TASE), Israel (ISIN NL0009690619 / securities number 1121607). The agreed purchase price is c. ILS 1.4 billion or ILS 440 per share.

BCP owns a substantial real estate portfolio in Germany of which two thirds are high quality residential assets in 'A' locations, including attractive residential development projects in the city centres of Dusseldorf and Aachen, with the remainder consisting of c. 330,000 sqm of commercial real estate. The residential portfolio consists of more than 11,000 units in high growth markets anchored by Leipzig (30%), Bremen (10%), Hannover, Kiel and Dortmund (each 9%), generates annual rental income of c. EUR 45 million and complements ADLER's existing portfolio favourably.

The closing of the purchase agreement is subject to the condition of ADLER acquiring at least 5% of BCP shares by means of a Special Tender Offer pursuant to the laws of Israel (STO) that ADLER intends to launch for the purchase of up to 25.80% of the shares in BCP.

In this STO, ADLER intends to offer all shareholders the same price as in the purchase agreement, i.e. ILS 440 per share representing a premium of 12.3% to yesterday's closing price at the Tel Aviv Stock Exchange. The STO will be subject to certain statutory conditions under the laws of Israel. The closing of the purchase and the STO will further be conditional on obtaining merger clearance by the German Federal Cartel office prior to the end of the acceptance period.

Senior Management members of BCP, Ofir Rahamim, Gal Tenenbaum and Fred Ganea, have irrevocably undertaken vis-a-vis ADLER to tender their respective shareholdings of a combined 5.62% into the STO with a right to sell any of these shares to ADLER to the extent not taken up through the STO. On the basis of these agreements, the STO and the purchase agreement with Redzone, ADLER is targeting a stake of up to 70% plus one share in BCP for a maximum consideration equivalent to approx. EUR 539 million (based on today's exchange rate according to Bloomberg).

The acceptance period commences with the publication of the offer memorandum, which ADLER intends to publish on 19 February 2018. ADLER intends to set the end of the acceptance period for 22 March 2018 in which case the settlement of a successful offer is expected to take place at the beginning of April 2018.

Upon completion of the transaction, ADLER will fully consolidate BCP and expects to realize operational and financial synergies in an expected amount of EUR 6 million annually from improved access to financing and increased economies of scale. ADLER expects that the transaction will improve its FFO I by c. EUR 20 million annually and enhance the value of its core portfolio by more than EUR 1 billion (Gross Asset Value).

The acquisition and the STO will be financed from existing cash in ADLER, the proceeds from the recent sale of its stake in ACCENTRO Real Estate AG, the sale of non-core assets and by funds provided under an in place bridge loan financing agreement. ADLER does not rule out that it may decide to acquire all remaining shares in BCP in the mid- to long-term.

Kempen is financial adviser to ADLER jointly with J.P. Morgan who is also acting as sole provider of acquisition financing to ADLER.

For enquiries, please contact:

Dr Rolf-Dieter Grass

Head of Corporate Communication

ADLER Real Estate AG

Telephone: +49 (30) 2000 914 29

Important Information

This ad hoc announcement has been issued by ADLER Real Estate AG ("ADLER ") solely for the purpose of disclosing inside information and publishing the intention to make a special tender offer. Moreover, it is neither an offer to purchase nor a solicitation to sell securities of Brack Capital Properties N.V. ("BCP"). The final conditions and further provisions relating to the special tender offer will be published in the offer memorandum. ADLER as bidder reserves the right to deviate from the basic terms presented herein in the final terms and provisions of the special tender offer. Investors and holders of shares in BCP are strongly advised to review the offer document and all other documents related to the special tender offer, as they will contain important information. In accordance with Israeli law, the special tender offer will be conducted solely on the basis of the applicable provisions of the Israeli law, in particular the Israeli Companies Law, 1999 and the Israeli Securities Regulations (Tender Offers), 2000 ("Tender Offer Regulations"). The intended special tender offer is not made or intended to be made pursuant to the laws of any jurisdiction other than those of Israel. Notifications and the publication of information on the intended special tender offer are intended to be made in Israel only in accordance with the requirements of the Tender Offers Regulations, unless a notification or other publication is required or permitted under the respective laws of other jurisdictions.

To the extent permissible under applicable law or regulation, ADLER or its brokers may purchase, or conclude agreements to purchase, shares in BCP directly or indirectly, outside of the scope of the intended special tender offer, before or after the period in which the special tender offer remains open for acceptance. This also applies to other securities which are directly convertible into, exchangeable for, or exercisable for BCP shares, such as convertible bonds, except that ADLER and its broker may also exercise such convertible securities during the acceptance period under the special tender offer, provided that such convertible securities were purchased prior to the date of the Special Tender Offer Memorandum. These purchases may be completed via the stock exchange at market prices or outside the stock exchange at negotiated conditions. Any information on such purchases will be disclosed as required by law or regulation in Israel.

This ad hoc announcement may contain statements, assumptions, opinions and predictions about the anticipated future development of ADLER or BCP (forward-looking statements) that reproduce various assumptions regarding results derived from ADLER's or BCP's current business or from publicly available sources that have not been subject to an independent audit or in-depth evaluation by ADLER and that may turn out to be incorrect at a later stage. All forward-looking statements express current expectations based on the current business plan and various other assumptions and therefore come with risks and uncertainties that are not insignificant. All forward-looking statements should not therefore be taken as a guarantee for future performance or results and, furthermore, do not necessarily constitute appropriate indicators that the forecast results will be achieved. All forward-looking statements relate solely to the day on which this ad hoc announcement was issued to its recipients. It is the responsibility of the recipients of this ad hoc announcement to conduct a more detailed analysis of the validity of forward-looking statements and the underlying assumptions.

17-Feb-2018 CET/CEST The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases.
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