Vonovia to make US$1b offer for Sweden's Victoria Park

[FRANKFURT] Vonovia, Germany's biggest residential property company, on Thursday announced that it would make a public cash offer for Swedish real estate company Victoria Park AB for a total of 9.56 billion Swedish krona (S$1.44 billion).

Vonovia said it would tap equity markets for around 1 billion euros for the deal, which has been recommended by Victoria Park's bid committee, and that the offer would be fully financed by a bridge facility.

"We are very excited about entering the Swedish market for the first time, and we are particularly happy that we identified Victoria Park as a company that follows the same business principles", Vonovia Chief Executive Rolf Buch said.

Vonovia also reported financial results for the first quarter, with funds from operations (FFO 1), a measure of recurring free cash flow considered key for real estate companies, up 12 per cent to 243.6 million euros.

That compared with the average forecast in a Reuters poll of analysts for 241 million euros.

Vonovia raised its earnings guidance for 2018, forecasting FFO I would increase to between 1.03 billion and 1.05 billion euros, up as much as 13 per cent from 2017.

REUTERS