DGAP-News: DEMIRE Deutsche Mittelstand Real Estate AG: Public Takeover Offer for All Shares of Fair Value REIT-AG


DGAP-News: DEMIRE Deutsche Mittelstand Real Estate AG / Key word(s):
Offer/Merger
DEMIRE Deutsche Mittelstand Real Estate AG: Public Takeover Offer for
All Shares of Fair Value REIT-AG

31.07.2015 / 09:15

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DEMIRE Deutsche Mittelstand Real Estate AG Public Takeover Offer for All
Shares of Fair Value REIT-AG

              - Takeover in the form of an exchange offer: Two DEMIRE
                shares for one Fair Value share

              - Offer currently corresponds to a price of EUR 10.02 per
                Fair Value share based on the XETRA closing price of
                DEMIRE's shares on 30 July 2015

              - Offer includes a premium of 11.00 % based on the
                relationship of the values of both companies based on the
                further refined EPRA NAV (adjusted, diluted) per share
                (status: 27 July 2015)

              - With a successful takeover, portfolio of commercial real
                estate to grow to a market value of roughly EUR 1 billion

              - Significant synergies and efficiency gains expected

              - Targeted LTV of 50-60 % for the combined company

              - Intended change to Prime Standard segment 

              - Fair Value's major shareholders undertake to accept
                Takeover Offer

Frankfurt/Main, 31 July 2015 - Today, the Executive Board and the
Supervisory Board of DEMIRE Deutsche Mittelstand Real Estate AG ("DEMIRE",
ISIN DE000A0XFSF0) decided to submit a voluntary public takeover offer
pursuant to the German Securities Trading Act (WpHG) for all shares of Fair
Value REIT-AG ("Fair Value") (ISIN DE000A0MW975). In the event of the
successful completion of the Takeover Offer, a stock-market listed
specialist for commercial real estate in secondary locations will be formed
and will possess a portfolio valued at around EUR 1 billion with annual net
rent of EUR 77.5 million.

The takeover shall be executed as an exchange offer. Subject to the final
determination in the offer document, DEMIRE will offer the Fair Value
shareholders two new no-par value bearer shares of DEMIRE, with a notional
interest in DEMIRE's share capital of EUR 1.00 each for one Fair Value
share. This represents an exchange ratio of 1:2. The new shares, to be
created from a capital increase in kind that must still be resolved by the
Extraordinary General Meeting of DEMIRE to be convened on short notice,
will be entitled to dividends as of 1 January 2015. The offer includes a
premium of 11.00 % based on the relationship of the values of both
companies based on the further refined EPRA NAV (adjusted, diluted) per
share (status: 27 July 2015). In the opinion of the Executive Board, this
value is primarily relevant for the valuation of real estate companies.

Major shareholders of Fair Value, who hold a total of 23.21% of the share
capital, support DEMIRE's offer and have irrevocably committed to accept
the Takeover Offer. These shareholders include, inter alia, Obotritia
Capital KGaA, whose personally liable partner is Mr. Rolf Elgeti, Chairman
of the Supervisory Board of Fair Value, who holds the shares indirectly
through subsidiaries. Furthermore, today, DEMIRE and Fair Value entered
into a so-called business combination agreement in which the two companies
have established their current understanding with regard to the
implementation of the Takeover Offer and the general support of the Fair
Value Management Board.

The transaction, which in its technical implementation takes into account
the requirements of the REIT Act, is due to be completed by the end of
2015, subject to a minimum acceptance rate of 50.1% of the voting rights
and further customary market terms and conditions. The final terms and
conditions and the other provisions of the public Takeover Offer will be
contained in the offer document after publication approval is given by the
Federal Financial Supervisory Authority.

The shareholders of both Fair Value as well as those of DEMIRE can profit
considerably from the takeover. The expanded real estate group, with around
175 commercial properties in the office, logistics and retail asset classes
and more than 1.1 million m² of space (more than 810,000 m² from DEMIRE and
approximately 275,000 m² from Fair Value) will have significantly more
clout on the market and considerable economies of scale. The portfolio with
a market value totalling roughly EUR 1 billion will generate annual net
rent of over EUR 77.5 million.

The combination of these two companies creates a homogeneous portfolio,
which can be managed more efficiently. The diversified overall portfolio in
fast-growing secondary locations will also be expanded in the future in
order to sustainably strengthen the position obtained as an established
holder of commercial real estate and to be able to realise further
economies of scale. At the forefront of this will be the acquisition of
properties with tenants with good credit, increasing equity of the Group
and the generation of sustainable and clearly positive cash flows. A
further common mid-term target is the payment of a dividend.

DEMIRE expects that the future size of the Company following the takeover
will lead to cost advantages due to the increased visibility inter alia in
the capital markets. With the intended change to the Prime Standard
segment, this increased transparency will provide better access to the
capital markets. Also expected are around EUR 2 million p.a. from synergies
and economies of scale in the administration and management of the
portfolio by DEMIRE's in-house asset, property and facility management and
general and administrative expenses. Future costs savings can also be
realised in the area of financing.

"Fair Value's diversified portfolio with a current valuation approach of
around 12 times net rent, blends in exceptionally well with DEMIRE's
portfolio. The portfolio includes tenants with good credit, has a positive
cash flow and offers development potential. Furthermore it is financed with
interest rates of an average of 2.7% and an LTV of approx. 50%. Currently,
the intrinsic value of Fair Value is in our view not fully reflected in the
stock price. DEMIRE and Fair Value also follow the same objectives in terms
of strategic positioning. Both companies have lean administration and a
strict cost discipline as well as excellent acquisition channels. Whereas
DEMIRE's core capabilities lie in the acquisition of properties in
"distressed situations", Fair Value has extensive know-how in the
value-creating acquisition and management of closed-end fund structures.
The average interest obligations beyond all liabilities will decline from
the current 4.7% to initially around 4.2%. For the combined platform, we
see excellent conditions to gradually steer the LTV ratio to the desired
range of 50% to 60% and to considerably reduce the interest burden on our
financial debt. Together with the synergies and economies of scale of the
joint organisation that covers the entire value chain of real estate
management, these measures will contribute to a sustainable improvement in
the consolidated profits", explains Markus Drews, member of the Executive
Board of DEMIRE.

The Executive Board 

About DEMIRE Deutsche Mittelstand Real Estate AG

Leading holder of commercial real estate

DEMIRE Deutsche Mittelstand Real Estate AG is transforming itself into a
leading holder of German commercial real estate. The core business
activities of the Frankfurt/Main- headquartered real estate group consist
of the acquisition, the management and the rental of commercial real estate
and their further development, for example, through modification,
modernisation or expansion, and increasing their value through their active
portfolio management.

As of the end of July 2015, the commercial property portfolio consisted of
more than 810,000 m2 of rentable space that mainly comprised office,
logistics and retail properties. Annualised net rent excluding utilities
amounts to approximately EUR 52.2 million. The portfolio's regional focus
lies in Bavaria, North Rhine-Westphalia, Baden-Württemberg, Saxony, Hamburg
and Bremen as well as in the Rhein-Main and Rhein-Neckar areas. The
in-house asset, property and facility management ensures the optimum
management and development of the holdings

The DEMIRE real estate group pursues a buy-and-hold-strategy combined with
active portfolio management. It is concentrated on both the value-added and
core-plus investment approaches. The combination of these two approaches
offers a balanced risk-return ratio and attractive opportunities.

The real estate group's lean structure allows it to take action quickly and
flexibly. The shares of DEMIRE Deutsche Mittelstand Real Estate AG (ISIN
DE000A0XFSF0) are listed in the regulated market (General Standard Segment)
of the Frankfurt Stock Exchange.

Contact 

DEMIRE Deutsche Mittelstand Real Estate AG 
Lyoner Straße 32 
60528 Frankfurt/Main 
Phone: +49 (0) 69-719 189 79 0 
Fax: +49 (0) 69-719 189 79 11 
Email: ir@demire.ag
Web: www.demire.ag

Investor Relations 
GFEI Aktiengesellschaft 
Lars Kuhnke 
Phone: +49 (0) 511 47 40  23 10 
Email: ir@demire.ag



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Language:    English                                            
Company:     DEMIRE Deutsche Mittelstand Real Estate AG         
             Lyoner Straße 32                                   
             60528 Frankfurt am Main                            
             Germany                                            
Phone:       +49 (0)69 / 719 189 79 0                           
Fax:         +49 (0)69 / 719 189 79 11                          
E-mail:      info@demire.ag                                     
Internet:    www.demire.ag                                      
ISIN:        DE000A0XFSF0                                       
WKN:         A0XFSF                                             
Listed:      Regulated Market in Frankfurt (General Standard);  
             Regulated Unofficial Market in Berlin, Stuttgart   
 
 
End of News    DGAP News-Service  
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