Hembla publ : Statement by the independent bid committee of Hembla in view of Vonovia’s cash offer

Statement by the independent bid committee of Hembla in view of Vonovia's cash offer

Hembla's independent bid committee unanimously recommends the shareholders not
to accept Vonovia's cash offer.

Background


This statement is made by Hembla AB (publ)'s ('Hembla' or the 'Company')
independent bid committee pursuant to section II.19 of the Nasdaq Stockholm
takeover rules (the 'Takeover Rules').

Vonovia SE[1], through its indirectly wholly-owned subsidiary HomeStar InvestCo
AB[2] ('Vonovia'), has on 7 November 2019 announced a cash offer to the
shareholders of Hembla to transfer all of their shares in Hembla to Vonovia at a
price of SEK 215[3] per class B share (the 'Offer').

The total value of the Offer amounts to approximately SEK 19.979 billion, based
on the current number of outstanding shares in Hembla.[4] According to the
timetable included in the offer document for the Offer which was made public on
8 November 2019, the acceptance period commenced on 11 November 2019 and will
end on 9 December 2019 at 17:00 CET and settlement is expected to commence on or
around 16 December 2019. For further information about the Offer, please see
Vonovia's offer document which was made public on 8 November 2019.

According to the terms and conditions made public by Vonovia, the price in the
Offer will not be increased and the Offer is not subject to any conditions.
Hembla's shareholders do not have any withdrawal rights under the Offer.

The board of directors has appointed an independent bid committee within itself,
consisting of the board members Patrick Forslund, Fredrik Brodin and Karolina
Keyzer (the 'Committee') to represent the Company in connection with the Offer
and to make a statement. The Committee has appointed Patrick Forslund as
chairman of the Committee.

As part of the Committee's assessment of the Offer, the Committee has appointed
Handelsbanken Capital Markets ('Handelsbanken') as provider of a fairness
opinion regarding the Offer. Furthermore, the Committee has engaged the
Company's financial and legal advisors, Bank of America and Vinge, respectively.

The Offer's impact on employees etc.

Under the Takeover Rules, the Committee must, on the basis of Vonovia's
statements in the Offer, present its opinion regarding the impact that the
implementation of the Offer may have on Hembla, particularly in terms of
employment, and its opinion regarding Vonovia's strategic plans for Hembla and
the anticipated effects such plans will have on employment and on the locations
where the Company conducts its business.

The Committee notes that Vonovia, in the offer document which was made public on
8 November 2019, states that Vonovia values the competence of Hembla's
management and employees and that Vonovia looks forward to welcoming them to the
group. Vonovia further states that Vonovia will work to ensure that efficiencies
are realised and that Hembla is enabled to make full use of Vonovia's expertise,
purchasing and financing power. After the completion of the Offer the
capabilities and needs of the new combined operations will be carefully
reviewed. As of now, no resolutions have been made on any changes to Hembla's or
Vonovia's employees and management or to the existing organisation and
operations, including regarding the terms of employment and locations of
Hembla's and Vonovia's businesses.

The Committee assumes that this description is correct and has in relevant
respects no reason to take a different view.

Acquisition of shares prior to the Offer

The Committee notes that Vonovia, in the offer document, states that an
agreement regarding acquisition of shares in Hembla was entered into between
Vonovia and Hembla's largest shareholder Vega Holdco S.à r.l., an entity wholly
-owned by real estate funds advised by the Blackstone Group Inc. ('Blackstone'),
on 23 September 2019 whereby Vonovia acquired approximately 69.30% of the votes
and approximately 61.19% of the share capital in Hembla.

The share purchase agreement with Blackstone was conditioned upon that all
necessary regulatory approvals for the Offer and acquisition of Hembla,
including approval by relevant merger control authorities, had been granted. In
view of all approvals being granted on 5 November 2019, Vonovia completed the
acquisition of shares in accordance with the agreement.

In addition to the aforementioned share purchase agreement, it is noted in the
offer document that Vonovia, during the period 23 September 2019 - 6 November
2019, acquired additional shares in Hembla and as of the day of the announcement
of the offer document on 8 November 2019 held a total of 6,136,989 class A
shares and 53,528,573 class B shares in Hembla, corresponding to approximately
71.69% of the total voting rights and approximately 64.21% of the share capital
in Hembla.

The Committee's recommendation

The Committee bases its statement on an overall assessment of a number of
factors that the Committee has considered relevant for the evaluation of the
Offer. These factors include, but are not limited to:

  · Hembla's current position and expected future development based on the
Company's growth model and possibilities and risks related thereto;
  · Hembla's average annual growth rate for the last three years, which, in
terms of long-term net asset value (EPRA NAV) per share, has amounted to 26.4%;
  · Hembla's share price development, the stock market's valuation of Hembla,
and Hembla's valuation based on the Offer in relation to other comparable listed
real estate companies; and
  · Vonovia's Offer price in relation to other comparable acquisitions of listed
real estate companies.

The Committee notes that the price per share which Vonovia is offering
represents:[5]

  · a premium of 11.5% compared to the closing price of SEK 192.80 for Hembla's
class B shares on Nasdaq Stockholm on 20 September 2019, which was the last day
of trading prior to the announcement of Vonovia's acquisition of approximately
69.30% of the voting rights and approximately 61.19% of the share capital in
Hembla from Blackstone;
  · a discount of 0.5% compared to the closing price for Hembla's class B shares
on Nasdaq Stockholm of SEK 216.00 on 6 November 2019, which was the last day of
trading prior to the announcement of the Offer; and
  · a premium of 9.1% compared to the highest recorded share price for Hembla's
share.[6]

The Committee notes that the price per share offered by Vonovia corresponds to
116.6% of Hembla's reported EPRA NAV (long-term net asset value) per share of
SEK 184.41 as of 30 September 2019.

The Committee further notes that the price per share in Vonovia's acquisition of
shares from Blackstone corresponds to the price per share in the Offer.

The assessment is also based on Handelsbanken's fairness opinion as to the
fairness from a financial perspective of the Offer for the shareholders in
Hembla. According to the fairness opinion, which has been attached to this press
release, Handelsbanken's opinion is that the Offer, subject to the conditions
and assumptions stated in the opinion, is not considered fair from a financial
perspective for the shareholders in Hembla.

Following an overall assessment, the Committee is of the opinion that the Offer
does not fully reflect Hembla's growth potential and value from a financial
perspective. In light of the above, and on the basis of the current state of the
market and interest rate level, the Committee therefore unanimously recommends
Hembla's shareholders to not accept the Offer.

However, the Committee is of the opinion that it is beneficial for the Company
that a well-known and long-term investor such as Vonovia becomes the new
majority owner and can contribute to the Company's continued development through
its access to network, capital and competence. At the same time, it is up to
each individual shareholder, in such shareholder's evaluation of the Offer, to
carefully consider his or her financial alternatives. The Committee notes that
Vonovia has an expressed long-term perspective and has indicated that they will
prioritise investments before dividends and that the liquidity in Hembla's share
may become more limited going forward.

This statement shall in all respects be governed by and construed in accordance
with Swedish law. Any dispute arising out of or in connection with this
statement shall be settled exclusively by Swedish courts.

Stockholm on 21 November 2019

Hembla AB (publ)

The independent bid committee

For further information, please contact

Patrick Forslund, board member and the chairman of the independent bid
committee, phone [phone]

This information is information that Hembla AB (publ) is obliged to make public
pursuant to the EU Market Abuse Regulation and the Takeover Rules. The
information was submitted for publication, through the agency of the contact
person set out above, on 21 November 2019, at 18:00 CET.

[1] Vonovia SE is a public European Company (Societas Europaea) with its
registered address on Bochum, Germany, Bochum Local Court, HRB 16879, and
registered in the German company register (Unternehmensregister) with
registration number HRB 16879.

[2] One of Vonovia SE indirectly wholly-owned subsidiaries with registration
number 559152-5372.

[3] Should Hembla, prior to settlement of the Offer, distribute dividends or in
any other way distribute or transfer value to its shareholders, the
consideration in the Offer will be reduced accordingly.

[4] Based on a total of 92,924,306 outstanding shares and a consideration of SEK
215 per share in Hembla.

[5] Based on the offer document which was made public on 8 November 2019.

[6] The highest closing price for Hembla's class B share on Nasdaq Stockholm,
SEK 197, was recorded on 4 September 2019.

About Hembla

Hembla is a property company focusing on residential properties in the Greater
Stockholm region and other growth areas. The company's business concept is to
own property portfolios slated for a gradual renovation of apartments in
conjunction with the natural turnover of tenants. This can take place quickly
and cost-efficiently thanks to extensive experience from the company's
renovation method which, among other things, means that no evacuation needs to
take place. In addition to this, the company creates value through the
development of building rights in existing portfolios. The market value of the
company's properties amounted to SEK 33,508 million on 30 September 2019. The
total rental value amounted to SEK 1,967 million annually on 30 September 2019.
The economic occupancy rate is high - vacancies are virtually non-existent.
Hembla is listed on Nasdaq Stockholm.

Attachments:
ENG Fairness Hembla 20191121.pdf
11210213.pdf