No deal - yet

"The price of 11.50 euros ($13.1) per share offered by Deutsche Wohnen in no way represents the fair value and fails to take into account both the significant hidden assets or a strategic premium," shareholder Alexander Proschofsky, who owns about 1.5 percent of Conwert's shares through his firm Cube Invest, said Monday. But he added that an investment from a professional, specialized real estate firm like Deutsche Wohnen was certainly a positive development.

Petrus Advisers, which owns 6.7 percent of the Austrian firm, was equally dismissive. "I just don't understand the offer," said fund manager Klaus Umek. "They must have made a mistake with the price."

But Umek was also sympathetic in principle to the German company. "I'm glad they're here," he said, before adding that Conwert was a "pearl" that had been badly mismanaged.

Fair price

Conwert's share prices on the Viennese stock market opened 9.4 percent higher, at 12 euros, on Monday, after Deutsche Wohnen announced Sunday evening that it was prepared to bid 1.15 billion euros for its Austrian rival.

"In light of the restructuring risks and the necessary significant costs in implementing the transaction and the optimization of Conwert, the shareholders will receive a fair price for their share," Deutsche Wohnen head Michael Zahn said.

He also argued that it makes strategic sense for Deutsche Wohnen to buy Conwert, since 25,000 of its 31,000 properties are located in Germany, particularly in the Rhineland region, as well as Berlin, Dresden, and Leipzig. But many of these properties are in need of significant investment, he said.

bk/uhe (Reuters, dpa)