Swedish real estate company Castellum has launched a NOK 30.8 bn (€2.9 bn) takeover bid for Nordic peer Entra which would create the largest property company in the region and one of the most sustainable property giants in the world.
The Swedish firm's tabled offer for Norway's biggest listed property company comes in the wake of an informal approach to Entra which was rejected last Wednesday, with Entra stating that it wanted to remain independent.
The Castellum bid also exceeds an offer from rival Swedish firm SBB made last Tuesday, worth NOK 165 per share compared to Castellum's NOK 170.86 per share offer.
However with both SBB and Castellum now circling, the Norwegian government, which holds an 8.2% stake in Entra, agreed to sell its shares to Castellum at NOK 169 per share. Entra shareholders responded on Thursday, agreeing to study the offer.
'The board will, with the assistance of its advisers, in due time diligently consider such offer, including its financial terms, and a further announcement will be made when appropriate,' Entra said in a statement.
Synergies
Castellum said that its combination with Entra would create total synergies of at least SEK 300 mln (€30 mln) per year, including SEK 150 mln of cost synergies and SEK 150 mln of financial synergies. Moody's confirmed that the combination of the firms would be 'credit positive', offering significant long-term benefits.
Castellum calculated that the synergies would represent 'additional value' to Entra shareholders, boosting the effective value of its offer to more than NOK 185 per share.
Castellum is one of Sweden's largest listed property players, with a SEK 986 bn gross asset value (GAV) portfolio. 71% of its holdings are in the office sector, a quarter of which have government tenants. Some 17% of its holdings are in logistics and it also owns a co-working subsidiary called United Spaces. The firm has a strong, local presence in 17 regions across Sweden, as well as in Copenhagen and Helsinki.
Further bids
As of 30 September, Entra, which owns manages and develops office properties in Norway, owned and managed around 1.3 million m2 of space across 90 properties. Its property portfolio has a GAV of NOK 50 bn. Around 60% of its tenants are from the public sector.
Entra's focus is on environmentally friendly properties, largely in the major cities of Oslo, Bergen, Stavanger and Trondheim.
However, broker Carnegie suggested that the Castellum tie-up was not a done deal, with further offers likely to emerge from private equity players, local Norwegian funds or SBB. The Entra share price rose above the current offer price supporting this thesis.
'We would not rule out a counter bid up to a maximum of NOK 200 per share,' said Carnegie.
