KOWO: GAGFAH submits a notarized purchase offer
3/23/2007
In an officially notarized statement, the GAGFAH GROUP has reconfirmed its offer of € 160.5 million for the purchase of roughly 5100 residential units belonging to the housing company KOWO. This notarized purchase offer was also communicated to the Bayerische Hypo- und Vereinsbank today.
"The Erfurt City Council will take a decision on the sale of the units based on the tender documents. In doing so, it is not bound by the decision of the KOWO supervisory board", emphasizes Burkhard Ulrich Drescher, CEO of the GAGFAH GROUP. "Should the Council decide otherwise, DKB Immobilien cannot claim compensation against the city. This view is upheld by an expert opinion from one of Germany's leading law firms in the field of German commercial law."
The expert opinion, in summary, states:
- "DKB Immobilien AG could not claim compensation either against KOWO mbH Erfurt or the city of Erfurt if DKB's offer to purchase the real estate portfolio is not accepted.
- What was not reviewed, and there is something to be said for it, was whether KOWO management would conversely owe compensation to a company making a higher bid that was not considered."
Drescher: "It is open to the Erfurt City Council to accept the clearly higher offer from the GAGFAH group for the purchase of residential units without the fear of financial loss. We would be happy to discuss this further at any time. The tender documents permit resumption of negotiations as well as changes in schedule."
In a letter to the Erfurt City Council, Drescher emphasized the visibly better terms and conditions of the GAGFAH offer as compared to the DKB offer.
- The GAGFAH GROUP is prepared to pay € 160.5 million for the housing portfolio. That is roughly € 4 million more than the DKB offer.
- The GAGFAH GROUP undertakes to contribute € 1 million to the foundation "Mensch und Wohnen" (People and Living). Revenues will go towards targeted projects in Erfurt.
- Naturally, the GAGFAH GROUP will take over from the Social Charter all rules and regulations for the protection of lessees.
- All other contractual provisions underlying the invitation for tenders are accepted.
"We have set standards in lessee protection throughout Germany through our Social Charter", emphasizes Drescher. "It is but natural for us to comply with these standards. This was officially confirmed by the city of Dresden just a few days ago. The regional economy would also benefit from a sale of residential units to GAGFAH. In the coming two years, we would invest € 20 million in KOWO's inventories. Foremost among those
About GAGFAH S.A. and the GAGFAH GROUP
GAGFAH S.A. is a stock corporation (société anonyme) domiciled in Luxembourg. GAGFAH's key business areas are the ownership, management, and acquisition of a geographically diversified, high-quality residential property portfolio throughout Germany. The most significant subsidiaries of GAGFAH S.A. are GAGFAH GmbH, NILEG and WOBA DRESDEN. With a portfolio of over 168,000 rental apartments located throughout Germany, GAGFAH is Germany's largest listed residential property company. GAGFAH generates 95% of its income from the rental of attractive residential accommodation and strives to continually improve its services. GAGFAH lives up to its social responsibility, for example through special tenant protection rights and its "Mensch und Wohnen" foundation.