We have decided to close our position in Berlin IV, following last week’s announcement that Immeo Danish Holding Ltd., an indirect subsidiary of Foncière des Régions SA, has filed a voluntary public offer to the shareholders in Berlin IV at a price of DKK 4.99.
Berlin IV is the second of our top-picks which will/has been bought out over the recent months, following Chinese mobile gaming developer and publisher CMGE.
We see a low likelihood that there will be a higher bid, primarily due to the fact that Foncière des Regions SA controls already of 25.27% of the votes and has a binding commitment of another 44.4% of the votes, bringing the total percentage of votes under control to 69.67%.
(Shareholders in Berlin IV, including chairman Erik Stannow (Stannow Invest ApS), Board Member Ole E. Mortensen (IEI Portfolio A / S) and CEO Søren Krarup (SK Berlin Invest ApS, Astheo Holding ApS), who together represent 42.1% of the share capital and 44.4% of the vote, have given a binding undertaking to accept the offer from Immeo Danish Holding ApS.)
Based on the latest published annual report, corresponds to a valuation of the properties of almost EUR 1,800 per square meter. The offer represents a premium of 43% (adjusted for dividends for the financial year 2014/2015) compared to the closing price of B shares on NASDAQ Copenhagen on Oct. 7, 2015, when Berlin IV stated that it has received an unsolicited approach with a non-binding interest in acquiring a controlling stake in Berlin IV.
The Berlin IV share is currently trading at DKK 4.84, i.e. 3% below the takeover price. For investors with low risk tolerance we think it makes sense to keep their position and realise those 3% upside as well. For our own portfolio, we see bigger upside elsewhere.