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MarketScreener Homepage  >  Equities  >  Oslo Bors  >  Entra ASA    ENTRA   NO0010716418


Real-time Quote. Real-time Oslo Bors - 01/18 10:28:32 am
192.8 NOK   +0.05%
02:50aENTRA : Flagging notification in Entra ASA
01/07ENTRA : Announcement regarding launch of Castellum voluntary offer
01/07ENTRA : Castellum Launches Voluntary Takeover Offer for Entra
SummaryMost relevantAll NewsPress ReleasesOfficial PublicationsSector news

Entra : SBB announces intention to launch a voluntary tender offer to acquire Entra ASA to create the leading European social infrastructure player

11/24/2020 | 05:42am EST
<br />
Press release<br />
Stockholm / Oslo, 24 November 2020<br />
<br />
SBB announces intention to launch a voluntary tender offer to acquire Entra to
create the leading European social infrastructure player<br />
<br />
Samhällsbyggnadsbolaget i Norden AB ("SBB") announces its intention to launch a
voluntary tender offer (the "Offer") to acquire all the outstanding shares in
Entra ASA ("Entra"). The Entra shares are traded on the Oslo Exchange under
ticker "ENTRA". For more information on Entra, see www.entra.no.<br />
<br />
Under the terms of the Offer, Entra shareholders will be offered NOK 165 per
Entra share, delivered as a combination of NOK 115.5 in cash (the "Cash
Consideration") and NOK 49.5 (the "Share Consideration") in new SBB Class B
Shares, representing a premium of 26.3% compared to Entra's three months
volume-weighted average share price on 23 November 20201, and a premium of 14.8%
compared to Entra's closing share price on 23 November 2020. The terms of the
Offer imply a total equity value for Entra of NOK 30,052 million2. In aggregate,
up to a total of NOK 21.0 billion will be paid as Cash Consideration and the
issuance of a number of SBB Class B Shares representing up to a total of NOK 9.0
billion will be settled as Share Consideration3. The SBB Class B Shares are
traded on Nasdaq Stockholm, Large Cap.<br />
<br />
The proposed business combination has strong industrial logic and represents a
unique value proposition for both Entra and SBB shareholders and stakeholders,
who will benefit from:<br />
<br />
* The creation of the leading European social infrastructure player with
significantly enhanced scale and visibility, with a total pro forma Gross Asset
Value of SEK 131 billion as of 30 September 20204; <br />
<br />
* A uniquely positioned portfolio of social infrastructure properties, with a
well-diversified tenant base, virtually perpetual leases and almost full
occupancy underpinned by the strong sovereign credit ratings of the Nordic
countries;<br />
<br />
*A value creating transaction, which SBB expects to be accretive to its Funds
From Operations per share in the first year following completion, with
identified aggregate pre-tax run-rate synergies of approximately SEK 260 million
per annum; <br />
<br />
*A robust balance sheet, with improved credit metrics; well positioned to reach
the target of BBB+ during 2021; <br />
<br />
*An enlarged capital markets profile, with the combined company becoming the
leading listed real estate company in Northern Europe, with increased liquidity,
visibility and access to capital; and<br />
<br />
A strong commitment to become the most sustainable real estate company in the
world by 2030.<br />
<br />
Commenting on the transaction, CEO of SBB, Ilija Batljan, said: "We would like
Entra to become part of SBB and join us in our ambition to create the leading
social infrastructure company in Europe, a company with a unique, attractive and
stable property portfolio with long leases, high occupancy rates and a
diversified and high-quality tenant base across the Nordics. We see
opportunities to unlock significant synergy potential particularly from
refinancing benefits accelerating financial cost and operational savings, which
will benefit all shareholders and other stakeholders", and he continues: "Our
philosophy is that tenants should not have to tie up capital in the form of
buildings. They should instead be able to prioritise investing in people,
services and solutions to the benefit of society. Our role is to attract the
capital on competitive terms from domestic and international investors."<br />
<br />
SBB respects the accomplishments of the board and management team of Entra and,
accordingly, it is SBB's desire and intention to work collaboratively with Entra
in order to agree on a friendly transaction. To that end, SBB has recently
shared the terms of the Offer with the board of Entra, which is a meaningful
improvement to a previous offer which was shared in private with the board of
Entra. While SBB respectfully awaits a recommendation from Entra's board of
directors, SBB has chosen to publish its intention to launch an offer with the
aim to provide Entra's shareholders with an opportunity to accept the Offer
prior to year-end.<br />
<br />
Key Offer Terms and Structure <br />
<br />
Under the Offer terms, Entra shareholders will be offered NOK 165 per Entra
share, which will be delivered as a combination of NOK 115.5 in cash and NOK
49.5 in new SBB Class B Shares. <br />
<br />
Based on the SBB 5-day volume weighted average price to and including 23
November 20205, approximately 296 million SBB B Class shares will be issued to
Entra shareholders to fund the Share Consideration and a total of NOK 21.0
billion will be paid as the Cash Consideration, resulting in a 30% Share
Consideration and 70% Cash Consideration mix. Following completion of the
proposed transaction, assuming 100% acceptance of the Offer, existing SBB
shareholders will hold c.83.5% of the combined company's total shares6 and Entra
shareholders will hold c.16.5%. Further, Entra Shareholders will be offered the
ability to increase their allocation of cash or shares, subject to elections by
the rest of the shareholder base, under the Mix & Match facility. <br />
<br />
The Offer Price of NOK 165 per share represents a premium of approximately: <br
<br />
* 26.3% compared to the volume-weighted average share price of Entra Shares on
the Oslo Stock Exchange during the three months to 23 November 20207; and<br />
<br />
* 14.8% to the closing price of the Entra shares on the Oslo Stock Exchange on
23 November 20208. <br />
<br />
<br />
The Offer Price also provides Entra shareholders with an opportunity to realise
the value of their holdings in Entra at effectively the all-time high share
price since the IPO of the company of NOK 165.20, which was on 20 February
20209.<br />
<br />
In addition to delivering an attractive premium relative to various share price
benchmarks, the Offer Price also delivers full value relative to Entra's asset
value. Specifically, the Offer Price represents a premium of 3.1% to the EPRA
Net Asset Value of Entra based on the unaudited interim report as at 30
September 202010.<br />
<br />
The Offer also provides Entra shareholders with the opportunity to participate
in the strategic and financial benefits of the combination through the Share
Consideration.<br />
<br />
Background and Transaction Rationale<br />
<br />
SBB has a demonstrated track-record of long-term value enhancement of its
portfolio. Its strategy is focused on stable, low-risk assets with high-quality
tenants community service properties in the Nordics and Swedish rent-regulated
residential properties. One of the fundamental aspects of SBB's business is its
strong relationships with Nordic municipalities and it takes its
responsibilities to the community very seriously through its commitment to own
and develop social infrastructure assets. <br />
<br />
Responsible ownership and the goal of meeting general societal objectives are an
integral part of SBB's core philosophy and SBB believes that in this regard SBB
is the right partner for Entra and, most importantly, that the combined company
will have an exciting future together by playing an important role for
government financed tenants in the region and more broadly by being the
community service provider of choice in the Nordics.<br />
<br />
SBB has followed Entra closely over the past several years and has been
impressed by its high quality assets, its strong relationship with governmental
and municipal tenants, and its industry leading commitment to sustainability. A
combination with Entra has strong strategic rationale as it provides an
opportunity to further scale SBB's business in Norway whilst its portfolio has
strong similarities with SBB's portfolio, enabling SBB to continue its growth
ambitions of becoming the leading social infrastructure company in Europe. On
the basis of the strong strategic rationale for the combination, coupled with
the significant synergy potential, SBB believes that the Offer is highly
attractive to the stakeholders of Entra, including to Entra's shareholders who
are offered continued participation through the share element of the Offer.<br
<br />
SBB believes the combined company, with a substantially larger portfolio of
approximately SEK 131 billion in Gross Asset Value as of 30 September 202011 and
greater geographical footprint, would be even better positioned as a long-term
committed partner to government tenants and local municipalities, amongst
others, across the Nordic. By expanding into government infrastructure assets in
Norway, the management of SBB believes that the combined company will offer an
attractive property portfolio with highly stable and predictable cash flows,
underpinned by the strong sovereign credit ratings of the Nordic countries. The
combined property portfolio will be characterised by long-term lease terms, high
occupancy rates and a diversified tenant base, with a high concentration of
government supported occupants. Furthermore, SBB believes that the combination
will fit well with its long-term sustainability efforts and will enable the
combined company to converge their ESG goals with common focus on sustainability
leadership in the years to come.<br />
<br />
SBB has identified a total of c. SEK 260 million of expected run-rate synergies
pre taxation, reflecting a unique opportunity to create value for both sets of
shareholders. Approximately SEK 60 million of annual synergies are anticipated
to be driven by corporate efficiencies, optimisation of operations and active
asset management. An additional c. SEK 200 million of annual financing synergies
are expected to be generated through optimisation of the combined entity's
capital structure, supported by SBB's attractive cost of funding. These
operating and financing synergies are expected to be realised within the first
12 months post completion of the transaction.<br />
<br />
Offer Timeline and Conditionality<br />
<br />
The Offer features an accelerated transaction timeline and limited conditions to
closing. SBB is in the process of finalising a combined offer document and an
"Exempted Document" pursuant to and in accordance with Article 1 (4) (f) of
Regulation (EU) 2017/1129 (the "EU Prospectus Regulation"), and the Offer will
be launched following regulatory approval of the offer document, expected to
take place shortly. The aim is to announce the final result of the Offer prior
to Christmas.<br />
<br />
Completion of the Offer is subject to customary conditions including, but not
limited to, 90% minimum acceptance of the Offer, satisfactory due diligence, and
clearance from the Norwegian Competition Authority. The resolution to issue the
SBB Class B Shares for the Share Consideration will be resolved by SBB's board
of directors based on an authorisation granted by the annual general meeting
held on 27 April 2020 and is, as such, not subject to any approval by the
general meeting. The Cash Consideration in the Offer will be fully financed
through a combination of cash on balance sheet, available credit lines and debt
financing provided on a certain funds basis, and, as such, there are no
financing conditions to the Offer. Settlement is expected to take place as soon
as SBB has announced that the conditions for the Offer have been fulfilled or
that SBB has decided to complete the Offer by waiving any unfulfilled
conditions. The complete terms and conditions for the Offer, including
procedures for how to accept the Offer and detailed information regarding
settlement, are set out in the Offer Document.<br />
<br />
Advisers<br />
<br />
Arctic Securities, Citigroup Global Markets Europe AG and Goldman Sachs
International are acting as financial advisors to SBB. Arctic Securities is also
acting as settlement agent for the Offer. Advokatfirmaet Thommessen AS is acting
as Norwegian legal counsel to SBB and Advokatfirman Vinge KB is acting as
Swedish legal counsel to SBB. Advokatfirmaet Wiersholm AS is acting as Norwegian
legal counsel to the Receiving Agent.<br />
<br />
For further information, please contact: <br />
<br />
Marika Dimming, Investor Relations at SBB<br />
<br />
Phone: +46 702 51 66 89<br />
E-mail: ir@sbbnorden.se This is information that Samhällsbyggnadsbolaget i
Norden AB (publ) is obliged to make public pursuant to the EU Market Abuse
Regulation. <br />
<br />
The information was sent for publication, through the agency of the contact
person set out above, on 24 November 2020, at 11:40 a.m. (CET).<br />
<br />
Invitation to a conference call and webcast by SBB in connection with the
intention to launch a voluntary tender offer to the shareholders of Entra ASA<br
<br />
SBB invites investors, analysts and media to a conference call and webcast on 24
November 2020 at 12:15 a.m. (CET). The presentation will be held by CEO Ilija
Batljan in English and will conclude with a Q&A session. Questions can be asked
on the telephone conference or in written form through the webcast. No
pre-registration is needed. <br />
<br />
Webcast link: https://tv.streamfabriken.com/2020-11-24-pressconference<br />
To participate via telephone, please dial-in on the numbers below. <br />
<br />
Sweden +46 8 566 42 651 <br />
Norway: +47 23 500 243 <br />
United Kingdom: +44 3333 000 804 <br />
United States +1 855 85 70 686<br />
Code 11045225#<br />
<br />
After the presentation, a recording of the webcast will be available on the
webcast link.<br />
<br />
About SBB:<br />
<br />
SBB was established in March 2016, and is the leading Nordic social
infrastructure property company. It has a portfolio across Sweden, Norway,
Finland and Denmark with a gross asset value of SEK 81 billion as of 30
September 2020. SBB generates most of its income from the management of its
social infrastructure property portfolio, which includes (i) community services
properties, such as elderly care homes, schools and group housing, in Sweden,
Norway, Finland and Denmark and (ii) rent- regulated residential properties in
Sweden. SBB also generates additional income streams from property renovations,
property development activities and real estate transactions. SBB's business
model is to acquire and manage properties and deploy permanent capital to
effectively generate sustainable and steady risk-adjusted returns. As of 30
September 2020, community services properties and rent-regulated residential
properties accounted for approximately 78% and 16% of the SBB Group's total
portfolio by gross asset value, respectively. SBB has built its business based
on strong and difficult to replicate relationships with municipalities. SBB
takes its responsibilities to the community very seriously by also developing
building rights for social infrastructure. SBB's series B shares (ticker SBB B)
and D shares (ticker SBB D) are listed on Nasdaq Stockholm, Large Cap. SBB's
preference shares (ticker SBB PREF) are listed on Nasdaq First North Premier
Growth Market. Certified Adviser is Erik Penser Bank (contact:
certifiedadviser@penser.se / +46 84638300). Please see www.sbbnorden.se for
further information about SBB.<br />
<br />
Footnotes<br />
1) Referencing Entra's volume-weighted average share price for the three months
to and including 23 November 2020 of NOK 130.66 (source: Bloomberg).<br />
2) On the basis of 182,132,055 Entra shares outstanding.<br />
3) Provided that SBB does not use its right to, in whole or in part, settle the
share consideration in cash.<br />
4) Applying NOKSEK exchange rate of 0.96.<br />
5) SEK 29.1262 (source: Bloomberg).<br />
6) Based on total outstanding shares for SBB of 1,501,534,791 (pro forma for
44,533,762 Class B shares to be issued in respect of the Svea Fastigheter
transaction, and including class A, B, D and preference shares).<br />
7) Using Entra's volume-weighted average share price for the three months to and
including 23 November 2020 of NOK 130.66 (source: Bloomberg).<br />
8) Using Entra's closing share price of NOK 143.70 as of 23 November 2020
(source: Bloomberg).<br />
9) All time high based on daily closing prices.<br />
10) Entra EPRA NAV of NOK 160 as of 30 September 2020.<br />
11) Applying NOKSEK exchange rate of 0.96.

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© Oslo Bors ASA, source Oslo Stock Exchange

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