Bloomberg News

TAG May Join Mid-Caps Index as Property Owner’s Value Jumps

June 05, 2012

TAG Immobilien AG (TEG) may join Germany’s DAX Mid-Cap Index after the Hamburg-based real-estate manager’s market value jumped about 64 percent this year.

Deutsche Boerse AG (DB1), the operator of the Frankfurt exchange, will announce any changes to the 50-member index known as the MDAX after the market closes today. Deutsche Boerse decides which stocks to include in its indexes by considering issues including each company’s market value and share-trading volume.

“TAG has a good chance of being admitted,” said Frank Neumann, an analyst at Bankhaus Lampe with a hold rating on the stock. “It’s had a large increase in market capitalization and trading volume, which not only makes it an important participant in the real-estate sector, but also in capital markets.”

TAG’s market value of 754 million euros ($938 million) compares with 466 million euros for Deutz AG, the smallest company in the MDAX. A Deutsche Boerse committee meets every quarter to decide whether to remove or add companies to its indexes. At the last review on March 5, machinery maker Duerr AG (DUE) replaced Heidelberger Druckmaschinen AG (HDD) on the MDAX.

TAG is the largest German real-estate company that’s not included in the index. Its market value has this year been lifted by acquisitions and a 127 million-euro share sale.

In March, the company agreed to buy DKB Immobilien AG from Bayerische Landesbank for 160 million euros, almost doubling its number of homes to about 56,000. TAG also owns office buildings.

The company has gained about 27 percent in Frankfurt trading this year, the third-best performance among stocks listed in the SDAX index for small companies, which has climbed almost 4 percent.

On a May conference call, TAG Chief Executive Officer Rolf Elgeti said the company could qualify for the MDAX as early as June. Gaining entry would be “positive,” spokeswoman Britta Lackenbauer said. “It would put us in another league,” she said.

To contact the reporter on this story: Dalia Fahmy in Berlin at dfahmy1@bloomberg.net.

To contact the editor responsible for this story: Andrew Blackman ablackman@bloomberg.net.


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