First Berlin – Aroundtown SA Research Update (21/11/2019)

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.

Abstract
Aroundtown (AT) and TLG Immobilien AG (TLG) have agreed on ?binding terms' for a potential merger. AT will make an offer through a voluntary public takeover to all TLG shareholders, who will receive 3.6 AT shares for each TLG share based on the 30 June 2019 NAVPS of the two companies. Both landlords estimate an FFO increase of the combined company in the range of €110m to €139m p.a. (pre-tax) within five years post merger. Including the identified synergy potential, the transaction will be accretive from year 1. The transaction is fully supported by TLG's major shareholder and boards. The latter will recommend that their shareholders accept the offer. Our rating is Buy with a €9.8 price target.