In August 2020, the Company sold a 30 per cent stake in Aareon to Advent, for strategic reasons following a highly competitive process. The contractual documentation entered into between the Company and Advent in this context is designed for a multi-year partnership, and structured in line with usual market convention for such a joint venture. It provides for both unilateral rights for disposal and dissolution in the Company’s favour, subject to certain scenarios and specific points in time, as well as corresponding rights protecting Advent’s position as a minority shareholder, which are also in line with usual market convention – such as a right to tender, or a pre-emptive right in the event of an early disposal of shares by the Company.
The long-term strategic partnership between the Company and Advent focuses on value creation at Aareon. A spin-off would threaten – or might even thwart – this plan; moreover, it would not lead to an accrual of value for the Company itself, which contributes to the sustainable development of Aareal Bank Group. Furthermore, the outflow of assets associated with such a spin-off would require coordination with the supervisory authority. In addition, the spun-off entity (“New Aareon”) would be subject to statutory secondary liability (Nachhaftung) for five years, which would likely result in a significant burden upon the value of “New Aareon”.
For these reasons, the contractual documentation for the joint venture has not – and does not – provide any provisions explicitly governing any spin-off, which would therefore need to be negotiated with the joint venture partner.
This view is shared by the Bidder (Atlantic BidCo), which has therefore undertaken in the Investment Agreement not to seek any sale or a spin-off during the term of the Agreement (three years after closing).