Ad hoc: PREOS Real Estate AG proposes to the Annual Shareholders' Meeting a resolution on the acquisition of up to 94.9% of publity Investor GmbH as part of a non-cash capital increase in return for the issue of new shares

Publication of inside information pursuant to Article 17 MAR

PREOS Real Estate AG proposes to the Annual Shareholders' Meeting a resolution on the acquisition of up to 94.9% of publity Investor GmbH as part of a non-cash capital increase in return for the issue of new shares

Leipzig, 19/Juli/2019 - The Executive Board and the Supervisory Board of PREOS Real Estate AG ("PREOS") (m:access, ISIN DE000A2LQ850) resolved today to propose to the Annual Shareholders' Meeting of PREOS a resolution on the acquisition of up to 94.9% of the share capital of publity Investor GmbH ("Investor"), a wholly-owned subsidiary of publity AG ("publity"), as part of a non-cash capital increase excluding shareholders' subscription rights ("Transaction"). This was immediately preceded by an agreement with the publity Executive Board on the key aspects and the execution of the transaction. The non-cash capital increase is to take place in return for the granting of up to 47,450,000 new shares at a value of EUR 8.00 per share to publity. The exchange ratio is to be 5:2, i.e. for every two shares in the Investor, publity is to receive five new shares in PREOS. The exchange ratio is based on an Investor valuation of EUR 400 million. The capital increase against contribution in kind is to be carried out to the maximum possible extent, at which the percentage share of the shares to be contributed to the Investor is still below the participation threshold applicable at that time, above which the contribution would trigger the payment of a real estate transfer tax. A contribution agreement shall be concluded following the resolution of the Annual Shareholders' Meeting.

The Investor is an intermediate holding company through which publity has been building up the new division of the group's own real estate business since the end of 2018 and has since purchased properties with a market value (after full establishment) of around EUR 600 million and a total rentable office space of around 200,000 m². In June 2019, the "Großmarkt-Leipzig" property with a rentable area of around 18,000 m² was successfully resold to a US investor. When acquiring real estate, the Investor benefits from publity's extensive real estate pipeline and its distinctive network and know-how in the high-price commercial real estate segment (EUR 40 to 300 million). In addition to the use of bank loans, the financing of real estate acquisitions by the Investor is also ensured through cooperations with third party financing partners, such as currently the Meritz Financial Group, based in Seoul, Korea, and its asset manager IGIS Asset Management Co. Ltd. ("Meritz Group"), with which Investor plans to invest in the higher three-digit million range over the next few months. Additionally, Investor manages its own portfolio of non-performing loans with a nominal value of EUR 2.3 billion.

PREOS, which currently focuses on the acquisition and management of real estate with a volume of approximately EUR 10 to 25 million, intends to gain access to publity's extensive real estate pipeline in the high-price commercial real estate segment through this transaction, in order to be able to expand its own real estate portfolio as quickly and as large-scaled as possible by taking advantage of market opportunities and recourse to the investor's financing partners. This access is secured by a long-term asset management agreement between the Investor and publity, which will also be continued as a result of this transaction.

Based on the valuation approaches used in this transaction, the value of the PREOS real estate group will increase to up to approximately EUR 574 million if the transaction is successfully completed. publity will hold a stake of up to 66.21% in the share capital of PREOS. The current indirect majority shareholder of PREOS, Thomas Olek, is also the indirect majority shareholder of publity.

Following the execution of this transaction, PREOS intends to issue a convertible bond with a nominal value of up to EUR 300 million. As part of this issue, publity is to contribute to PREOS receivables of up to EUR 150 million from shareholder loans already granted to the investors and still to be granted in the future, in order to transfer the relevant liquidity management to PREOS. Therefore, the issue of the convertible bond is to take place by means of a so-called crossed exclusion of subscription rights, i.e. publity must waive its subscription right as part of the subscription right cash emission to the extent that it is separately entitled to contribute the loan claims. Further details of the emission have not yet been determined.

PREOS will publish the invitation to an Annual Shareholders' Meeting on August 28, 2019 today, at which the capital increase through non-cash capital increase and a new authorization to issue convertible bonds, among other things, are to be resolved.

Investor & Public Relations edicto GmbH Axel Mühlhaus Eschersheimer Landstraße 42 60322 Frankfurt/Main Phone: +49(0) 69/905505-52 E-Mail: preos@edicto.de