A future to build on

October 19, 2021

PREOS Global Office Real Estate & Technology AG plans admission of new majority shareholder and reallocation of shares in subsidiary GORE German Office Real Estate AG

Publication of inside information pursuant to Article 17 of Regulation (EU) No 596/2014

  • Luxembourgian investment company with its own investor consortium of established European insurance companies to become new majority shareholder of PREOS
  • Contribution of a Luxembourg real estate portfolio worth over EUR 1 billion by Luxembourg investment vehicle to PREOS subsidiary GORE German Office Real Estate AG in return for the issue of new GORE shares
  • Subsequent contribution of newly acquired GORE shares by Luxembourg investment vehicle to PREOS against issuance of new PREOS shares
  • Successive placement of all GORE shares to investors– cash inflow for further growth of PREOS
  • GORE's focus on Luxembourg real estate market

Frankfurt/Main, 19 October 2021 10:50am – PREOS Global Office Real Estate & Technology AG ("PREOS", ISIN DE000A2LQ850) intends to add a holding company consisting of a Luxembourg investment company with its own investor consortium of established European insurance companies, managed by a general partner, as a new majority shareholder in PREOS. As part of this process, the PREOS subsidiary GORE German Office Real Estate AG ("GORE") is to be restructured and sold. The Supervisory Board of PREOS has approved this planned measure on the basis of a letter of intent signed with the participation of the PREOS Group parent publity AG ("publity") and GORE. . In the event of a positive conclusion of the due diligence reviews, a basic agreement on the implementation of the transaction will be signed. The Letter of Intent essentially provides for the following steps:

In a first step, a portfolio of Luxembourg real estate project developments consisting of an investment holding and a debt fund with a market value expected to exceed EUR 1 billion is to be contributed to GORE by means of a capital increase in kind against the issuance of new GORE shares. The value to be applied to the GORE shares is to be determined on the basis of the stock exchange price and on the basis of a company valuation and is expected to be within a range of EUR 2 to EUR 3 per GORE share. This will result in a value adjustment requirement for PREOS with regard to the approximately 23 million shares valued at EUR 4.00 in the annual financial statements per 31 December 2020.

In a second step, the newly created GORE shares are to be contributed to PREOS also in the context of a capital increase against contributions in kind against the issue of new PREOS shares. The value to be applied to the PREOS shares shall also be determined in this case on the basis of the stock exchange price and on the basis of a company valuation and is expected to be in a span of EUR 4.50 to EUR 5.50 per PREOS share.

The required Shareholders' Meeting resolutions for the first two steps are planned for the beginning of 2022.

The GORE shares held by PREOS following these two transaction steps are to be reallocated to investors in a third step. The revenues accruing to PREOS from the re-placement of the GORE shares are to be used as equity shares for the further expansion of the PREOS real estate portfolio with a focus on premium properties in the commercial real estate market in Germany and, in a further step, in other European financial metropolises. Based on this inflow of funds, PREOS plans to expand its real estate portfolio by properties with a total market value of at least EUR 3 billion by the end of 2023. In the course of the transaction, PREOS will seek to fill two supervisory board positions as well as the executive board. The negotiations with Thomas Olek regarding the assumption of a management board position in PREOS (see ad hoc notification of 22 September 2020 and corporate news of 28 December 2020) are to be terminated in this context and Mr Olek is to continue to be available solely as an advisor to the publity Group.

In the course of the transaction, GORE is to sell its German real estate portfolio and focus exclusively on the acquisition of commercial real estate projects in Luxembourg. For this purpose, a transfer of the registered office to Luxembourg as well as a change of name to "PREOS Luxembourg" and a subsequent cross-border change of the legal form are planned. Furthermore, an additional listing of the GORE shares on the Luxembourg Stock Exchange is being sought. The realignment of GORE is also to be accompanied by a new appointment to two Supervisory Board positions and an expansion of the GORE Executive Board by an additional person.

As a result of the transaction, the Luxembourg-based investment company is expected to hold a majority stake of more than 50% in PREOS through its Luxembourg investment vehicle and PREOS shall have sold its entire stake in GORE. Against the background of the planned transaction, publity will no longer pursue the negotiations with the Asian conglomerate regarding the acquisition of a stake in PREOS (see Corporate News dated 28 January 2021).

Additionally, PREOS will no longer voluntarily apply IFRS accounting standards in the future, but will prepare its accounts solely in accordance with the German Commercial Code (HGB) beginning with the 2020 financial year. Furthermore, the planned issuance of a EUR 400 million bond and the implementation of a 10% cash capital increase (see ad hoc notification of 28 July 2020 and ad hoc notification of 22 September 2020) are ultimately withdrawn. The transaction will also result in a new regulation of the future dividend policy and thus the discontinuation of the previously pursued dividend policy (see ad-hoc dated 07.08.2020).

EXPLANATORY PART

About PREOS Global Office Real Estate & Technology AG

PREOS Real Estate & Technology AG ("PREOS") is an active real estate investor focused on office properties. PREOS acts as an efficient management holding company. The acquisition focuses on office properties with development potential in German metropolitan regions. Value creation is generated by targeted asset management measures. Developed portfolio properties are sold in the event of adequate sales opportunities. The corporate strategy is to significantly expand the real estate portfolio through acquisitions in the coming years. The PREOS share (ISIN DE000A2LQ850) is listed in the over-the-counter segment m:access of the Munich Stock Exchange (PAG.MU) and on Xetra (PAG.DE). The company headquarters of PREOS is located in Frankfurt/Main.

 

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PREOS Global Office Real Estate & Technology AG plans admission of new majority shareholder and reallocation of shares in subsidiary GORE German Office Real Estate AG