Grainger closer to German purchase

Mar 4 2008 by Karen Dent, The Journal

THE UK’s biggest residential landlord has moved a step closer to realising its ambition of owning property in Germany worth £383m.

Newcastle-based Grainger plc has formally published its £35m tender offer document for the German residential property company FranconoRheinMain AG, which is listed on the Frankfurt Stock Exchange.

If the deal goes through, it will boost Grainger’s interests in Germany from 4,500 homes to 6,800.

Quinton Hill Lines, Grainger’s director of corporate development and funds, said: “I fully intend to expand further to reach a critical mass of €1bn.

“The attraction of Germany is that it is the largest economy in Europe and its housing market has suffered for quite some time with stagnation. In general, the price of the properties are less than it costs to build them.”

Grainger announced it had exchanged contracts with Franconofurt AG for the acquisition of a 54% stake in the German property business the end of January.

It is now also looking to buy all of the company’s shares that are currently in the marketplace.

The cash offer of £1.37 per share – a 19.3% premium on the price it initially agreed with Franconofurt – is conditional on receiving acceptances representing 70% of FranconoRhein- Main’s shares.

Grainger Plc chief executive Rupert Dickinson said: “We will secure a strong portfolio of assets, which we believe will complement our existing holdings and provide us with an opportunity to extract latent value through the application of our property and asset management capabilities.”