Dhe troubled real estate company Adler Group wants to simplify its nested group structure and therefore take the subsidiaries Adler Real Estate and Consus Real Estate off the stock exchange. As the Adler Group announced on Thursday evening, as the parent company, it holds a 96.72 percent stake in Adler Real Estate and intends to squeeze out the remaining shareholders with a squeeze-out process. The process is enshrined in stock corporation law and allows a majority owner to buy minority shareholders out of the company for a cash settlement, even if they prefer to keep their shares.
The Adler subsidiary Consus also announced on Thursday evening that it would take its shares off the stock exchange and terminate their inclusion in the open market of the Frankfurt and Munich stock exchanges. The delisting in Frankfurt is expected to take effect on September 30, while the delisting in Munich is expected to take place within the next three to six months. According to Adler, the decision on the delisting in Munich lies with the management of the local stock exchange, whereby investor protection issues must be taken into account. On Friday, after the squeeze-out plan was announced, the Adler Real Estate share jumped up by up to around 60 percent. No significant price movements were observed for the shares of the Adler Group and Consus Real Estate.
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For detailed view
However, the importance of the shares of the Adler subsidiaries has faded into the background compared to the shares of the parent company Adler Group, which are listed in the S-Dax. However, the subsidiaries play an important role in the business.
Confusing structure
The Adler subsidiary Consus is responsible for the development of new real estate projects, many of which have made little progress recently. Adler Real Estate, on the other hand, has around 10,000 apartments, mainly in North Rhine-Westphalia and Berlin, which are let primarily to middle- and low-income tenants. The Adler Group has a total of 27,500 residential units.
While Adler Real Estate is based in Berlin, the headquarters of the central Adler Group is in Luxembourg. The group structure is therefore quite confusing. That’s partly because the Adler Group was formed in 2020 through mergers between Adler Real Estate, project developer Consus, and competitor Ado Properties. Since then, the shares of the Adler subsidiaries have lost importance for the stock exchange compared to the shares of the Adler mother company.
Investors’ confidence in the real estate company has plummeted since a special forensic audit failed to completely dispel serious allegations by short seller Fraser Perring. The auditing firm KPMG therefore refused to issue an attestation for the 2021 annual financial statements in April. The attestation was also refused for the annual financial statements of the subsidiary Adler Real Estate because the auditor could not assess with sufficient certainty whether transactions with other related parties had taken place and whether these transactions had been recorded completely and correctly.
Because of these doubts, the financial regulator Bafin has extended a balance sheet control at Adler Real Estate to the annual financial statements for 2021. The Bafin is also investigating whether there has been insider trading in Adler shares. In addition, the public prosecutor’s office is investigating in connection with a Düsseldorf real estate project by Adler.
