FRANKFURT -(Dow Jones)- German real estate financier Hypo Real Estate AG ( HRX.XE) said Monday it has agreed to buy Depfa Bank PLC (XETRA:DEP) (DEP.XE) for EUR5.7 billion in a move to create a global leader in public sector, commercial real estate and infrastructure financing.
In a statement, Hypo Real Estate said the acquisition will be financed with equity, hybrid instruments and cash, and that it will pay each Depfa shareholder EUR6.8 in cash, as well as 0.189 new shares in the combined group, for each share that they own.
It said that according to the closing price of Hypo Real Estate on Friday July 20, the total value of the offer amounts to EUR16.74 per share, or a 17% premium over Depfa's share price on that day.
In order to finance the acquisition, Hypo Real Estate said it has decided increase the capital of the company by issuing 67,036,087 new shares, or by 50%.
This will only take place once the acquisition is effective and all shares in Depfa have been transferred to Hypo Real Estate, it noted.
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