annual financial statement 2011 - conwert Immobilien Invest SE

CONWERT IMMOBILIEN INVEST SE
ANNUAL FINANCIAL 2011 STATEMENT ANNUAL REPORT 2011
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5.2. INVESTMENT IN AN ASSOCIATE DURING 2010
The investment in ECO amounted to 24.9% up to the takeover during the second half of 2010. This
investment was presented in the consolidated financial statements as an associate up to the date
of the takeover based on the amount of the stake owned. Following the successful conclusion of the
takeover, ECO was fully consolidated for the first time in the third quarter of 2010.
As part of a voluntary takeover offer, the conwert Group acquired additional shares in the listed
ECO during 2010 for a price of € 7.15 per share. The purpose of this acquisition was to better leverage
the opportunities available in the markets of the conwert Group.
The takeover offer ended on 3 November 2010 after the expiration of a three-month additional offer
period. The conwert Group now holds 95.76% of the share capital of ECO.
The voluntary takeover offer raised the stake held by the conwert Group in ECO to 87.23% by the
acquisition date on 1 August 2010. A further 8.53% of the shares were purchased for € 20.9 million
during the three-month additional offer period, respectively up to the end of that year.
The carrying amount of the acquired shares, excluding non-controlling interests, amounted to
€ 20.9 million.
The following table shows the fair value of the identifiable assets and liabilities of ECO on the initial
consolidation date (1 August 2010):
in € million Fair value on
acquisition date
Assets
Investment property 566.5
Other property, plant and equipment and intangible assets 0.1
Property held for sale 146.0
Receivables and other financial assets 11.0
Cash and cash equivalents 39.6
Deferred tax assets
Liabilities
15.8
779.0
Liabilities 438.5
Deferred tax liabilities 1.4
439.9
Total identifiable net assets 339.1
Non-controlling interests as of initial consolidation date (12.77%) (31.1)
Share of profit attributable to equity holders of the parent from an acquisition
below market value
(95.3)
Fair value of previous at equity investment (24.90%) (60.7)
Cash outflow for acquisition in 2010 152.0
The non-controlling interests resulting from the acquisition of ECO were recognised at fair value,
i.e. at the applicable stock market price.
The acquisition of the shares was based on the purchase price stated in the voluntary takeover
offer. This price was lower than the inherent value of the shares, which resulted in a positive effect
of € 95.3 million on earnings for the conwert Group. This amount is shown separately on the
income statement under position 14 “Gain from the acquisition of a company below market value”.
This acquisition also led to an impairment charge of € 14.9 million to the management contract
with ECO.
The stake originally held in ECO (24.9%) was valued at equity up to the date of acquisition, and the
carrying amount on the acquisition date equalled € 71.0 million. In accordance with IFRS 3.42,
this stake was remeasured as of the acquisition date to reflect fair value; the resulting loss of
€ 10.3 million is reported on the income statement under position 25 “Impairment charge to an
investment in an associate“ in financial results.
The fair value of the acquired trade accounts receivable amounted to € 2.3 million, which also
represents the gross amount.