Aroundtown was founded back in 2004 by real estate magnate, Yakir Gabay. A decade later in 2015, Mr. Gabay listed the shares publicly on the Euronext in Paris, and the Frankfurt stock exchange. In September 2019, TLG-Immobilien purchased 15% of the Aroundtown stock from Yakir Gabay for an estimated €1.5 billion euros.
Shortly thereafter, Aroundtown and TLG entered into discussions to merge their office, hotel and residential interests. Amir Dayan supported the TLG-Aroundtown merger, signing an irrevocable agreement that would see his 28% share stocks in TLG swapped for the newly issued post-merger stocks.
Last week, Aroundtown SA announced an acceptance rate of 77.5% in their voluntary public takeover offer for TLG IMMOBILEN, which includes all shares. Since Aroundtown already previously held shares in TLG, its total post-settlement share value is currently 77.8%.
The settlement date was on February 19, 2020 after TLG shareholders already accepted the offer from Aroundtown. The new commercial real estate company is said to have an asset value of around €28 billion.
Those with shares in TLG will receive 3.6 Aroundtown shares (€27.66 per TLG share) or a 3.2% premium.
The main shareholders in Aroundtown as of February 2020 were Avisco at 10% (controlled by Gabay), Blackrock at 5%, and various other investors holding shares below that mark such as Norges Bank, Fidelity Ams and Henderson
Such a high acceptance rate comes as the two real estate companies merge on a deal built on confidence in their combined ability. This new merged company is expected to be a leading real estate force in the pan-European regions, including a diverse portfolio in various high-profile cities.
It is said that Germany and Netherlands will represent two strong locations. Assets will mainly lie in Berlin, Munich , Frankfurt, Hamburg, and Amsterdam.
The complimentary portfolios from the two companies is expecting to bring not only high value potential, by also improve core development potential in high-profile areas.
Within five years of this merger, the combined interests of the merger are strategically designed to achieve operational/financial annual synergies that will amount to the same value as a pre-tax funds from operations (FFO) rise of €110m to €139m.
The final decisions regarding the management body are expected to be made in the near future. However, both Klaus Kragel (TLG supervisory board member) and Barak Bar-Hen (CEO of TLG) have been nominated by TLG for the new Aroundtown management body.
Aroundtown is not the only real estate success story of Yakir Gabay’s career. Mr. Gabay also founded Grand City Properties, and took them public in 2012. At the time of listing, stocks for GCP were valued at €2.7 per share.
Less than 8 years later, the stock value has increased by nearly 800%, (ETR:GYC) and currently traded at around €24. Even more impressive, Grand City Properties is recognized as the 4th largest publicly listed real estate company in Germany with 2,500 apartments in London and 80,000 properties located across Germany. Investors are expecting the property value in the UK to appreciate following the Brexit making Grand City Properties stock an attractive asset.