A €1.1bn private equity offer for almost a quarter of Hypo Real Estate undervalues the German property finance group, according to its management and board, which has declined to recommend the offer to shareholders.

HRE said the intrinsic value of its shares was “significantly higher” than the €22.50 offered led by JC Flowers, the private equity investor whose offer for a stake in the Dax-30 listed company was revealed last week. But HRE did not urge shareholders to reject the offer, which it continued to welcome in principle.