Immofinanz’s Settlement of Exchange Ratio for Merger with IMMOEAST AG

Nearly seven years after the start of the court review of the exchange ratio applied to the merger of IMMOEAST and IMMOFINANZ, IMMOFINANZ has reached an agreement in principle through out-of-court negotiations with most of the claimants and the representatives appointed for the respective shareholder groups to terminate these proceedings through settlement. The agreement in principle by the involved parties reflects a recommendation by the committee appointed by the commercial court in Vienna to review the exchange ratio.

“IMMOFINANZ intends to create legal certainty with this step and, in this way, avoid an ongoing legal dispute. Following the termination of legal proceedings with investors, this settlement over the review of the exchange ratio would end the last historical legal dispute at the shareholder level”, explained Oliver Schumy, CEO of IMMOFINANZ.

The agreement in principle, which has to be finally approved by all claimants, calls for a compensation payment to former IMMOEAST shareholders through the issue of 30,019,578 additional shares of IMMOFINANZ (ISIN AT0000809058) at a ratio of 0.088 shares of IMMOFINANZ AG for each former IMMOEAST share (ISIN Code AT000A0GYT7). Approximately 341.1 million former IMMOEAST shares would be entitled to receive this settlement. The compensation payment would amount to approx. EUR 54 million in total (based on a share price of EUR 1.80).
Bpv Hügel advised IMMOFINANZ AG. We conducted the settlement negotiations and structured the settlement terms and its execution along with comprehensive advice on corporate law and capital markets law aspects, in particular on the compensation by shares first time applied in the market; bpv Hügel already advised on the merger in 2010, represented in the review proceedings.
Under the Austrian Stock Corporation Act the exchange ratio of a merger can be challenged and reviewed in court proceedings taking place after the execution of the merger. The review proceedings, which started already 2010, have been settled. The settlement provides for compensation to the group of former IMMOEAST shareholders through distribution of additional IMMOFINANZ shares at a ratio of 0.088 IMMOFINANZ share per former IMMOEAST share. Approximately 340.7 million IMMOEAST shares were entitled to participate in the settlement. In total, approx. 30 million shares have been distributed out of treasury shares and as new shares from a share capital increase (authorized share capital). The compensation with shares has been applied the first time in review proceedings in Austria.

“We are delighted to advise IMMOFINANZ on this settlement and the compensation by additional shares, first time applied in the market, which also underlines the leading position of our firm representing listed companies in review proceedings of exchange ratios and squeeze-out compensations”, comments Partner Christoph Nauer. His team consisted of: Hanns F. Hügel (Partner, corporate/tax), Daniel Reiter (Attorney, corporate/capital markets), Walter Loukota (Attorney, tax), Kornelia Wittmann (Attorney, tax), Dominik Geyer (Attorney, litigation), Andreas Krist (Associate, corporate/capital markets) and Roland Juill (Associate, corporate/capital markets).


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