$2.1 billion effort to buy out Germany’s Aareal Bank fails

FRANKFURT (Reuters) – A buyout group seeking to take over Germany’s Aareal Bank in a $2.1 billion deal said on Friday that too few shareholders took them up on their offer and the bid had failed.

Big investors had been publicly resisting to tender their shares, with one calling the offer “lousy.”

In a final push last month, the buyout group, which included U.S.-based Advent International and Centerbridge Partners, raised their offer to 31 euros per share from 29 euros, valuing the lender 1.86 billion euros ($2.13 billion).

But on Friday, the prospective buyers said the minimum acceptance threshold of 60% had not been reached. “Therefore, the takeover offer has lapsed and will be unwound,” it said in a statement.

Aareal Bank’s management and its supervisory board had supported the deal.

Chief Executive Officer Jochen Kloesges said in a statement following the announcement of the deal’s failure that the bank’s shareholders instead “wish to continue supporting us on our path of sustainable value creation.”

“We will maintain in-depth dialogue with our investors,” he added.

Top investors who had balked at the deal during the bidding process said on Friday they welcomed the failure.

Petrus Advisers, which holds a stake of nearly 16%, called for leadership changes at Aareal.

“As the lead investor, we look forward to change at the top of Aareal and value creation for all shareholders,” it said.

Adam Epstein, co-founder of Teleios, which holds a 5% stake in the bank, said he was pleased with the outcome.

“Aareal’s board must do more to defend the company from such flagrant opportunism in the future,” he said.

($1 = 0.8731 euro)

(Reporting by Tom Sims and Alexander Huebner in Frankfurt; Editing by Chris Reese and Matthew Lewis)