- A joint holding company of funds managed by Oaktree and CURA, the family office of the Otto family and parent company of ECE, has entered into an investment agreement with Deutsche EuroShop
- Total value to shareholders of EUR 22.50 per share represents a substantial 44.0 percent premium over Deutsche EuroShop’s unaffected share price of EUR 15.63 per share at close of business on May 20, 2022
- Partnership between Oaktree and current anchor shareholder CURA will provide a strong and stable shareholder base to allow Deutsche EuroShop to navigate structural challenges facing the retail sector
- Deutsche EuroShop’s Management and Supervisory Board welcome the takeover offer priced at a significant premium above recent trading levels
23 May 2022 – London & Hamburg – Today, a consortium of private investment funds managed by Oaktree Capital Management, L.P. and CURA Vermögensverwaltung, the family office of the Otto family and parent company of ECE Group, through Hercules BidCo GmbH, which will be indirectly controlled by the consortium, announced its decision to make a voluntary public takeover offer for all no-par value shares of Deutsche EuroShop AG (ISIN: DE 000 748 020 4; WKN 748020). Deutsche EuroShop is a major shopping centre investor that owns a portfolio of 21 high quality centres in prime locations across Germany and selected cities in Central and Eastern Europe.
Supporting Deutsche EuroShop’s long term stabilisation and recovery
The offer represents a strategic investment in Deutsche EuroShop to ensure the company is able to respond to the challenges and opportunities in the current retail environment. In the past two years, the volatility of the retail sector has increased by the pandemic-associated lockdowns, supply chain disruptions and widespread consumer uncertainty due to the war in Ukraine. The Consortium is firmly convinced that longer-term resilience in the sector will require patience, investment and execution of a further swift adaptation towards omni-channel sales, dynamic use of floorspace, and consolidation to the best quality locations. Through this offer, the consortium will provide Deutsche EuroShop with a strong and reliable partner that also understands the business and will apply its expertise to assist the company in responding to the challenges and opportunities arising from the ongoing structural changes to the retail sector.
“Deutsche EuroShop has a top quality portfolio that we believe is underappreciated by the capital markets following a multi-year sell-off of the entire retail sector,” said Ben Bianchi, Managing Director and Head of European Real Estate at Oaktree. “In partnering with CURA and ECE, we believe we have the real estate expertise and financial resources to support the company in an increasingly competitive and evolving retail environment.”
“The ongoing headwinds that the retail sector has had to face have recently prevented the company from fully realizing the potential of its otherwise successful and conservative strategy. We have a long term perspective and the strength to jointly offer continued support for the company on its journey ahead,” said Dr. Volker Kraft, Managing Partner of ECE Real Estate Partners, the investment advisor to the consortium.
Details of the Voluntary Takeover Offer
The offer will be made at a price of EUR 21.50 per share of Deutsche EuroShop in cash. In addition, either by way of additional payment by the bidder or as dividend payment by Deutsche EuroShop, the shareholders of Deutsche EuroShop, who accept the offer, shall receive the amount of the dividend to be paid for the financial year 2021 which is expected to be an amount of EUR 1.00 per share of Deutsche EuroShop. This results in a total offer value of EUR 22.50 per share of Deutsche EuroShop. Deutsche EuroShop’s shareholders will benefit from a significant premium of 44.0 percent over the closing price of EUR 15.63 per share on close of business May 20, 2022, being the last business day before the announcement of the consortium’s intention to make a voluntary public takeover offer for the shares of Deutsche EuroShop.
The controlling shareholder of CURA, Alexander Otto, and entities controlled by him including CURA, who in total hold approximately 20 percent of Deutsche EuroShop’s share capital, have signed non-tender agreements and will not sell the shares held by them as part of the voluntary takeover offer. These shares, however, will be subject to a vote pooling agreement with the consortium resulting in the attribution of the related voting rights to Hercules BidCo GmbH following consummation of the takeover offer. CURA and Oaktree have signed a consortium agreement to work together on this transaction on an exclusive basis.
The takeover offer will be subject to a minimum acceptance threshold of 50 percent of Deutsche EuroShop’s share capital plus one share, including the shares subject to the vote pooling agreements which will be attributed to the consortium. The offer will be subject to further customary conditions, including the receipt of regulatory approvals.
Deutsche EuroShop has entered into an investment agreement with the consortium which contains the principal terms and conditions of the takeover offer. The consortium does not intend to enter into a domination and/or profit and loss transfer agreement with Deutsche EuroShop, and does not intend to de-list the company following completion of the offer.
J.P. Morgan is acting as financial advisor and Hengeler Mueller Partnerschaft von Rechtsanwälten mbB is acting as legal advisor to the Consortium. Gibson, Dunn & Crutcher LLP is acting as legal advisor to Oaktree and Milbank LLP is acting as legal advisor to CURA.
Offer document and further information
The voluntary public takeover offer will be made pursuant to an offer document to be approved by the German Federal Financial Supervisory Authority (BaFin). This offer document will be published following receipt of permission from BaFin, at which point the public takeover offer will commence. The offer document (in German and a non-binding English translation) and other information pertaining to the public takeover offer will be published on the following website: www.hercules-offer.com.