Though – for transaction-related reasons – we were only able to announce our press conference on Thursday just before midnight, the interest of the media was significant: after all, the Executive Board of IMMOFINANZ explained the planned spin-off of residential subsidiary BUWOG, which has now positioned its portfolio equally between Austria and Germany with its recent large-scale acquisition in Germany – 18,000 flats for about EUR 892 million.
"By splitting the complex portfolio into a commercial part and a residential one we expect a higher market capitalization than the existing one, because investors may invest in two different asset classes resp.
business models", CEO Eduard Zehetner explained.
"BUWOG will establish standalone capital market access, enable future growth and increased strategic flexibility, and it can focus entirely on the growth and optimisation of its own business strategy", says BUWOG CEO Daniel Riedl, who is also COO of IMMOFINANZ.
The plan stipulates that IMMOFINANZ shareholders receive one BUWOG share for every 20 IMMOFINANZ shares they own. 51% of BUWOG will then be in free float. The extraordinary general meeting, which is to decide on the split, is taking place on 14 March 2014. Provided there is shareholder approval, the BUWOG capital market prospectus will be published in mid-April 2014; we expect the initial listing of the BUWOG share around 28 April.
And how does the dividend policy of the two companies look?
"For the current fiscal year, BUWOG is the dividend", Zehetner said. His reason: “We are investing several hundred million euros in the acquisition of the German portfolio, and we can spend this money only once.” But with BUWOG's independence investors get the chance to participate in the performance of two shares and decide whether to concentrate on one of the two securities (and consequently one asset class). Afterward IMMOFINANZ will return to its long-term dividend policy.
BUWOG's dividend policy will be aimed at the company's earnings performance as well as sustainable earning power. The aim is to pay a dividend for the current 2013/14 financial year, according to Riedl.
A video excerpt of the press conference can be found here (video only in German language).
Numerous pictures also follow.