Frankfurt inter: alstria office REIT share – prospect of special distribution

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by Lars Winter, Euro on Sunday

However, the Canadians now want to get back part of the money invested in the purchase. Either in the form of a share buyback or – which is more likely – in the form of a special distribution. A distribution of around one billion euros is to be decided at the Annual General Meeting. As a result, 5.50 to six euros per share could be distributed to investors, above all Brookfield. Based on the current share price of EUR 13.40, the special dividend would yield a return of over 40 percent. In return, the North Americans want to lend on alstria office REIT’s real estate portfolio and take on financial liabilities of up to EUR 850 million.

The Hanseatic League does not need the money itself and it also unnecessarily increases the level of debt from almost 30 to a good 50 percent. The deal is quite questionable from an entrepreneurial point of view, it is always legal. Nevertheless, it can be worthwhile for free shareholders to buy the share a few weeks before the general meeting and speculate on the high special distribution, or that the discount will ultimately be smaller than the amount distributed. The fact that Brookfield itself could possibly take one or the other share from the free float onto its own book in the run-up to the general meeting gives the share additional price potential.

Image sources: Fotolia, Frankfurt Stock Exchange