Publication of inside information pursuant to Article 17 of the Regulation (EU)
The Executive Board of publity AG resolves to contribute up to 94.9% of publity Investor GmbH to PREOS Real Estate AG in return for the issue of new shares
Frankfurt/Main, 19/July/2019 – The Executive Board of publity AG (“publity“) has decided today to contribute up to 94.9% of the share capital (“Transaction“) of publity Investor GmbH (“Investor“), a wholly-owned subsidiary of publity, to the PREOS Real Estate AG (“PREOS“). The resolution was immediately preceded by an agreement on the key aspects of the transaction with the Executive Board of PREOS. The contribution is subject to a capital increase through contributions in kind to be resolved by the Annual Shareholders’ Meeting of PREOS, excluding shareholders’ subscription rights, in return for the granting of up to 47,450,000 new shares at a value of EUR 8.00 per share (“capital increase“). The exchange ratio shall be 5:2, i.e. for every two shares in the Investor, publity shall receive five new shares in PREOS. The exchange ratio is based on a valuation of the Investor of EUR 400 million. The capital increase is to be carried out to the maximum possible extent, at which the percentage share of the shares to be contributed to the Investor is still below the then applicable participation threshold, above which the contribution would cause real estate transfer tax to be levied. A contribution agreement shall be concluded following the resolution of the shareholders’ meeting of PREOS.
The Investor is an intermediate holding company through which publity has been building up the new division of the group’s own real estate business since the end of 2018 and has since purchased properties with a market value (after full establishment) of approx. EUR 600 million and a total rentable office space of approximately 200,000 m². The successful resale of the “Großmarkt-Leipzig” property with a rentable area of around 18,000 m² to a US investor already took place in June 2019. The Investor also manages its own portfolio of non-performing loans with a nominal value of around EUR 2.3 billion. With this transaction, the Executive Board intends to merge the real estate business of the Investor with the real estate business of PREOS, which has been listed on the OTC market of the Munich Stock Exchange (m:access) since December 2018, under which these real estate activities are to be bundled and financed in the future. publity is thus focusing its business model and concentrating on its activities as a pure asset manager.
PREOS is already the owner of a portfolio of highly profitable commercial properties in the German market with a market value in the dimension of approx. EUR 10 to 25 million. With the acquisition of the Investor, this portfolio will be supplemented by the significantly higher-priced properties of the Investor. The publity is to continue the asset management of the properties in this context and support the rapid development of the real estate business by granting access to its extensive real estate pipeline.
Thomas Olek is the majority shareholder of PREOS with an indirect stake of approximately 75.21% and is also the indirect majority shareholder of publity. On the basis of the valuation approaches used in the transaction, a listed real estate group with a value of up to approximately EUR 574 million will be created in the event of a successful capital increase. publity will hold a share of up to 66.21% of the share capital in this listed real estate group. The publity Executive Board intends to retain the majority shareholding in PREOS as a pure shareholding in the long term.
Following the completion of this transaction, it is planned that PREOS will issue a convertible bond with a nominal value of up to EUR 300 million, under which the publity claims from shareholder loans already granted to the investors and still to be granted in the future of up to EUR 150 million will be transferred to PREOS.
PREOS will publish the invitation to an Annual Shareholders’ Meeting on August 28, 2019 today, at which the capital increase and a new authorization to issue convertible bonds, among other things, are to be resolved.
The approval of publity’s Supervisory Board for the transaction is still pending.
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publity AG has established itself as a successful asset manager of German office real estate and has carried out more than 1,100 real estate transactions with partners since 2012 – including more than 600 property purchases for customers and more than 500 profitable property sales with an average holding period of 24 months. Assets under Management currently amount to approximately EUR 5 billion. publity benefits from broad market knowledge, a strong network and excellent access to the real estate market. The majority of property purchases are off-market deals. Currently, publity acts as asset manager for several different clients with whom long-term asset management contracts exist for a total of 122 assets. In addition, publity is in negotiations for the conclusion of further asset management contracts with third parties.
Executive Board of publity AG resolves contribution of up to 94.9% of publity Investor GmbH to PREOS Real Estate AG in return of issue of new shares