The below clearly a very big negative for DWNI GY transaction
Based on the following press release from Clearstream. The German Tax authority is set to claim back taxes on the cash component paid to GAFAH shareholders. The transaction closed on March 1st 2015, so the tax authority is asking investors to pay 26.4% tax on the cash consideration they received.
The tax will apply for every transaction where the consideration will be cash and stocks:
The terms were as follow: EUR 8.7514 + 0.3571 VNA GY
After tax the terms are: EUR 6.4 + 0.3571 VNA GY
This is clearly a very big negative for DWNI GY transaction as it will impact the cash component is a similar fashion. The cash component pretax was 7.56 and is now 5.56 after tax. I would expect DWNI to trade down toward the EUR 22 level, or lower as investor are likely to wipe out any potential takeover premium from the sector in Germany.
AGFAH: Cleastream about to claim back the 26.4% tax on the cash component
http://www.clearstream.com/clearstream-en/products-and-services/asset-services/tax-and-certification/d15041/78298
In addition to our customer communication D15032 from the 28 September 2015 in relation to the income tax treatment of the acquisitions who wants Western primer and the GAGFAH S.A. Clearstream Banking1 customers inform, that the Federal Ministry of Finance (BMF) in Berlin issued a first assessment on the banking associations.
After this, the BMF, intends to assume in both cases that the cash component to the one gem. § 20 para 4a set 2 i.V.m. § 20 para 1 No. is materially liable to tax 1 income tax Act (EStG) and also when a withdrawal to limited tax creditor subject to the withholding tax deduction.
The countries have the opportunity to comment on the proposal of the BMF 12 November 2015. If there is no differing opinion of countries to assess the BMF, the BMF will finally answer the request of the banking industry in the above mentioned sense.