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Prime Office stakeholders okay merger with German unit of Oaktree

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September 25
9:40 AM 2013

The shareholders of Prime Office REIT-AG voted to approve the company's merger plan with the German real estate unit of Oaktree Capital Group. In a statement, Prime Office said 79.8% of its stakeholders approved the deal. The new company would have a portfolio of office properties worth EUR 2.2 billion or USD 3 billion.

Under the terms of the agreement, Oaktree's OCM German Real Estate Holdings would own 61% of the newly-formed firm. After the deal would be completed, the Oaktree unit would issue new shares to raise EUR 175 million in funds.

An analyst said the merger was beneficial. Berenberg Bank Analyst Kai Klose said, "A combination makes sense. Investors will have their stakes diluted, but the entity created as a result will be much more profitable."

Based on the information presented on its website, OCM said its office buildings worth EUR 1.5 billion were located in Dusseldorf and Hamburg. Meanwhile, Prime Office has real estate buildings valued at EUR 700 million in Stuttgart and Frankfurt.

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