Takeover Offer Made to the Shareholders of Victoria Park AB, Sweden

On May 3, 2018, Vonovia SE (subsequently Vonovia) announced its intention, as part of its internationalization strategy, to make a public cash offering via a subsidiary to the shareholders of Victoria Park AB, Malmö, Sweden (subsequently Victoria Park), a Swedish listed company, for the purchase of all shares at a price of SEK 38.00 for each class A and class B share, and SEK 316.00 for each preference share. The value of this offer equals SEK 9,555 million for 100% of the shares, or approximately € 900 million.

As a leading housing company in Sweden, Victoria Park operates in an environment that is very similar to the German housing market. As does Vonovia, Victoria Park pursues a long-term company strategy guided by social criteria with the aim of offering its tenants attractive living spaces and thereby creating value. The company owns and manages a high-quality real estate portfolio of approximately 14,000 apartments with a focus in the metropolitan regions of Stockholm, Malmö and Gothenburg. The shares of Victoria Park are listed in the mid-market segment of the Nasdaq Stockholm stock exchange.

As of June 18, 2018, the last day of the acceptance deadline, the shareholders of Victoria Park had accepted the offer for a total of 34,056,463 class A shares, 97,962,486 class B shares, and 663,172 preference shares, equal to 54.4% of the share capital or 46.5% of the voting rights. Vonovia was furthermore granted two call options totaling 10.0% of the capital, or 12.4% of the voting rights. These call options can be exercised between May 15 and May 29, 2019.

Including the shares that were granted for Vonovia call options, this amounts to around 63.8% of the share capital and 58.7% of all voting rights in Victoria park (on a fully diluted basis), or 53.9% and 46.4% excluding the call options. The offer was completed on June 28, 2018.

Moreover, Vonovia extended the tender period until July 3, 2018, to give shareholders who had not accepted the offer the possibility of doing so. During the extended acceptance deadline, an additional 1.8% of the share capital or 2.0% of the voting rights were tendered to Vonovia. In addition, Vonovia acquired shares in the market at up to the offer price amounting to 0.6% of the share capital or 0.3% of the voting rights.

The offer for the shares tendered during the extended acceptance deadline was completed on July 11, 2018. At the end of the extended tender period and the acquisitions on the market, Vonovia possesses 56.7% of the share capital and 48.9% of the voting rights. Including the two call options, the share of equity equaled 66.8% or 61.2% of the voting rights.

Although Vonovia has less than 50% of the voting rights as of June 30, 2018, in accordance with IFRS 10.B41–B43, de facto control must be assumed, since it holds a majority of votes present at the Annual General Meeting.

With the completion of the transaction at the end of June 2018 and the resulting assumption of control, Victoria Park was included in the half-yearly financial statements with the balance sheet as of June 30, 2018, and solely with a preliminary purchase price allocation. This means that Victoria Park is included in the portfolio-based figures, e.g. balance sheet items, whereas the earnings contribution will only be visible from the third quarter of 2018.