Insights on the DPLTA from Vonovia’s earnings call
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In their Q3 2024 earnings presentation, Vonovia highlighted the importance of the DPLTA such as reduced complexities and stated that the exchange ratio will be made according to legal requirements.
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When asked whether they will consider a voluntary price instead of the legally required minimum price so as to drive up higher acceptance price, they said that they will wait for the valuation report and that their desire is not to increase the acceptance rate but to achieve a lean structure.
“The valuation work is currently on its way including a court-appointed appraiser, and we will await the results. We will then discuss it and decide with the invitation to the EGMs, which will take place in January you will see all the details. So that’s going to be pre-Christmas. So let’s wait for that,” CFO Philip Grosse said.
“But to be very clear and I think this is sometimes on understood, especially in the society, not so much in Europe. We are not doing this to get more shares from Deutsche Wohnen necessarily. We are doing it to get a determination agreement to clean up the structure,” CEO Rolf Buch added.
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Rolf Buch pointed out that Deutsche Wohnen minority shareholders will not receive the same compensation as Apollo. He also concurred with an analyst who asked whether the minority shareholders are at risk of getting a lower compensation than Apollo.
“This is different. So this will, of course, not be the case because there’s a big difference because Apollo structure does not allow to liquidate their shares, while the others have a liquid stock, very simple,” he said.
Assessment
The fact that Apollo structure doesn’t allow Apollo to liquidate their shares, effectively rules out the possibility of a squeeze-out in future. Also, the fact that Vonovia is not interested in a higher acceptance rate lowers the incentive for a higher exchange rate. However, the fact that they have stated that legal framework will be used to calculate the exchange rate means that the fair value will likely be used.