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Germany's 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 US$1.08 billion.

Vonovia said it would tap equity markets for part of the required funds 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.

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Vonovia also reported financial results for the first quarter, with funds from operations (FFO), a measure of recurring free cash flow considered key for real estate companies, up 12 per cent to 243.6 million euros (S$388 million).

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 would increase to between 1.03 billion and 1.05 billion euros, up as much as 13 per cent from 2017. REUTERS