First Berlin – Aroundtown SA Research Update (05/09/2019)

First Berlin Equity Research has published a research update on Aroundtown SA (ISIN: LU1673108939). Analyst Ellis Acklin reiterated his BUY rating and maintained his EUR 9.80 price target.

Aroundtown (AT) announced that commercial rival TLG Immobilien AG (TLG), has bought a 9.99% stake in AT from the company's main shareholder (Avisco Group) for €8.3 per share. This matches end of June EPRA NAV. TLG also entered into an option agreement to purchase a further stake of < 4.99% at the same price. The two landlords will now kick off talks for a possible merger. The news is hardly shocking, given common strategies and portfolio synergies. The potential size would make the company eligible for DAX inclusion and greatly improve prospects for the coveted A- S&P rating. However, discussions are early stage, and there are a number of hurdles to clear before a deal could be struck. Our rating is Buy with a €9.8 price target.