|Bid||41.24 x N/A|
|Ask||41.28 x N/A|
|Day's Range||41.04 - 41.72|
|52 Week Range||27.66 - 42.48|
|Beta (5Y Monthly)||0.25|
|PE Ratio (TTM)||9.70|
|Earnings Date||Aug 13, 2020|
|Forward Dividend & Yield||0.90 (2.18%)|
|Ex-Dividend Date||Jun 08, 2020|
|1y Target Est||44.86|
Michael Zahn became the CEO of Deutsche Wohnen SE (ETR:DWNI) in 2008. First, this article will compare CEO...
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(Bloomberg Opinion) -- Plenty of M&A deals make sense and yet never happen because of politics, personality or pride. The creation of a $40 billion German real-estate champion by combining Vonovia SE and Deutsche Wohnen SE is one such hardy perennial that could be attempted once again when the pandemic eases. There’s no doubting the value creation. The tricky part will be sharing it out fairly.Capitalized at 24 billion euros ($26 billion), Vonovia is considering an approach for its peer, which is worth 13 billion euros and focused on the hot Berlin market, Bloomberg News reported on Wednesday. Investors have long encouraged the idea given the evident economies of scale in property management. An attempt to hook up failed in 2015, when Deutsche Wohnen and its shareholders objected to the price being dangled. Today, politics are as big an obstacle.Rents in Berlin, a vibrant capital city with lots of parks and a lively art scene, are a political hot potato. A clamor for the renationalization of the listed landlords morphed into a policy of blanket rent caps, which some property owners are contesting. That could be a poison pill to a deal. Yet, if pitched properly, a tie-up could equally provide the context for reaching a new accord between politicians and the public, revising policies on rent and generally creating a more stable climate for investors. The key is showing that the value creation available here could help attain the public policy goal of increasing affordable accommodation.The combined workforce would not be large — around 14,000 — relative to the asset base. A lot of the legwork of property management is outsourced, which means the burden of cost savings would likely land on third-party contractors. The pain involved in cost reduction would therefore be less visible here than in some corporate takeovers. But the reality is there can be no savings without an impact somewhere.Assuming a combination can fly politically, Deutsche Wohnen’s management and shareholders are still a possible obstacle. Will it really be worth it for them? A transaction would have to be all stock. This is no time for Vonovia to be taking on more debt to pay out cash. In any case, targets don’t like to accept cash when it crystallizes a fall in their valuation driven by a market sell-off. A holding in the combination would give Deutsche Wohnen shareholders a stake in the benefits, making it hard to argue for a big premium.Takeover top-ups aren’t high in real estate anyway. Vonovia’s offers in its recent deals have on average been just 15% above the target’s pre-bid closing price, according to analysts at UBS Group AG. In practical terms, that would mean giving Deutsche Wohnen shareholders close to a 40% stake in the enlarged company, against 34% based on their share of Wednesday's combined market values.A deal would make sense and Vonovia is right to reheat the idea. Squaring the circle this time round won’t be much easier than last time. But if others in the sector start huddling together, there will be increased pressure to compromise and hammer out terms.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Hughes is a Bloomberg Opinion columnist covering deals. He previously worked for Reuters Breakingviews, as well as the Financial Times and the Independent newspaper.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Today we'll take a closer look at Deutsche Wohnen SE (ETR:DWNI) from a dividend investor's perspective. Owning a...
A Berlin district court said on Thursday it had found that the city's rent freeze law was unconstitutional and referred it to Germany's Federal Constitutional Court for a definitive ruling. The court said that Berlin's city legislature did not have the power to pass the legislation, which freezes rents in the German capital for five years. "In its decision, the 67th Civil Chamber ... found that the legal provisions of the 'Berlin Rent Ceiling' are formally unconstitutional because the city state of Berlin lacked the legislative competence to pass it," the court said.
European stocks on Friday extended gains from the previous session, helped by a surge in German real estate companies and on relief that trade tensions between the United States and China were easing. The pan-European STOXX 600 index rose 0.31% by 0715 GMT, after hitting near one-month highs on Thursday. The real estate sector sector jumped 1.71%, led by gains in shares of German real estate companies after a report that the rent freeze in Berlin could be less strict than previously planned.
To ward off rent hikes and evictions at the hands of new building owners, the city will purchase about 700 homes the much-coveted Karl Marx Allee neighborhood.
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