– alstria office REIT-AG (symbol: AOX, ISIN: DE000A0LD2U1) (“alstria”) announces that it has signed an Investment Agreement (the “Investment Agreement”) with Alexandrite Lake Lux Holdings S.à r.l. (the “Bidder”), a company controlled by real estate private funds of Brookfield Asset Management (“Brookfield”), pursuant to which the Bidder will make a voluntary public takeover offer for all of the outstanding shares in alstria that it presently does not own for € 19.50 per share in cash (the “Offer”).
The Offer values alstria at an equity value of € 3.5 bn and an implied gross asset value of € 5.0 bn. The Offer represents a premium of 6.8% to last reported EPRA NTA (€ 18.26 per share as of September 30, 2021) and 17.3% to the closing share price on November 3, 2021 (€ 16.62).
‘The office sector is going through a fundamental transformation, driven among others by evolving occupier demand and decarbonization needs’ said Olivier Elamine, CEO of alstria. ‘There is substantial value for the Company to be anchored with a sophisticated shareholder with a longer-term investment horizon than public equity usually allows for, notably during a phase of substantial investment. Brookfield shares our views and understanding of both the challenges and opportunities that will be offered by the market transformation.’
‘Through this offer, we will provide alstria with a strong and reliable strategic partner that understands its business and can deliver the stability needed to support the Company’s next development stage’, said Brad Hyler, Managing Partner and Head of European Real Estate at Brookfield. ‘As a long-term shareholder of alstria, we have a strong relationship with the Management Board and we are excited about the opportunity to combine alstria’s prime German office portfolio, established operating platform and market-leading ESG credentials, with Brookfield’s global real estate operating expertise and vast real assets ecosystem, to enable the business to realize its full potential.’
Comprehensive Investment Agreement
In the context of the Investment Agreement, the Bidder has committed to support the continued execution of the strategy of alstria in particular by reducing the annual dividend payment and re-invest excess cash by actively pursuing new value-add refurbishment and repositioning opportunities and accelerated assets rotation.
Brookfield supports the incumbent Management Board of alstria and intends for the current members to continue managing the Company after the Offer closes.
Brookfield seeks proportionate representation on the Supervisory Board following closing of the Offer, subject to its prevailing ownership level in the Company.
The Investment Agreement stipulates that employees are crucial to the success of alstria. As a result Brookfield intends to support alstria to attract, develop and retain talent and maintain a collaborative working environment. The Bidder has also committed not to take any actions that would result in business-related termination (betriebsbedingte Kündigung) of employees at alstria. It is currently planned that the headquarter of alstria will continue to remain in Hamburg and all local branches of alstria will continue to operate in their current form.
As part of the Investment Agreement, the Bidder has made a legally binding commitment not to enter into a domination and / or profit and loss transfer agreement with alstria for at least three years after the closing of the Offer.
Offer Overview
Brookfield intends to file the offer document with the BaFin in due course and the expectation is that the acceptance period will commence in early December 2021. The Offer is subject to a minimum acceptance threshold of 50% plus one alstria share (including the shares already owned by Brookfield) and certain further customary conditions including merger control clearance in Germany. The Offer is for all of the outstanding share capital of alstria that is not presently owned by Brookfield. The Transaction is expected to close in the first quarter of 2022.
The Management and Supervisory Board of alstria welcome Brookfield’s offer and believe that the transaction is in the interest of the Company. Subject to their review of the offer document, the Management and Supervisory Board intend to recommend that alstria’s shareholders accept the Offer.
Further information on the Offer will made available on the alstria website or by Brookfield.
Advisors
UBS is acting as exclusive financial advisor and fairness opinion provider, Allen & Overy is serving as legal advisor, and Skadden as a tax advisor.
