VIENNA (Reuters) - Austrian property group Immofinanz <IMFI.VI> has agreed to sell its 26 percent stake in rival CA Immo <CAIV.VI> for $882 million to U.S. investor Starwood, drawing a line under a failed merger attempt and lifting its shares 3.6 percent.
Starwood had launched a bid to buy up to 26 percent in CA Immo in April, shortly after the merger plan fell through.
But its offer, which was roughly $84 million lower than the price it agreed to pay now, was rejected by shareholders last month.
The U.S. property investment firm considers Austria as an attractive market and was committed to increase its real estate exposure there, it said in April.
"The sale of our investment... allows us to realise substantial profit and will also strengthen our capital structure through the repayment of the related financing," said Immofinanz Chief Executive Oliver Schumy.
The return on its 2016 CA Immo investment will be roughly 30 percent, Immofinanz said.
CA Immo management and regulatory authorities have to approve the deal and the closure is expected in the third quarter. Immofinanz said.
Parts of the proceeds will be used to repurchase up to 8.66 percent of its own shares, Immofinanz said. The buyback will start on July 16.
Immofinanz shares traded 3 percent higher at 21.00 euros at 0950 GMT. CA Immo shares were up 0.8 percent at 28.78 euros.
($1 = 0.8593 euros)
(Reporting by Kirsti Knolle; editing by Jason Neely/Keith Weir)
