Schage takes full control of 4th largest Norwegian mall owner

Oslo-based property firm Schage has acquired full control of Salto, Norway's fourth-largest shopping centre group, in a transaction reflecting a gross asset value of NOK 5 bn (€550 mln).

Schage's decision is somewhat surprising given that the firm, which co-founded and was the main shareholder in Salto, was behind the decision to put the mall group on the market.

Nordic corporate finance advisory firm Pangea Property Partners and law firm BA-HR ran the sales process for Salto, which owns 15 small and medium-sized shopping centres across Norway. Several attractive bids 'within and above the range of the asking price' were received from well-known domestic and international investors, according to Schage. But at a late stage the shareholder decided to bid for all the outstanding shares.

'During this process, we have become increasingly attracted by the company and we see great opportunities for the future,' said Egil Svoren, CEO of Schage Eiendom.

'Salto is one of the most promising property companies in Norway and there is significant potential for value creation, particularly related to the expansion plans. Schage has the resources and ability, and will not pass on this opportunity, although our conclusion differs from our thoughts when we initiated the sales process' Svoren added.

The sale comes three months after Sektor Gruppen, Norway’s second-largest shopping centre owner and manager, was acquired by Finnish peer Citycon for €1.5 bn.

Salto
Salto Eiendom was founded by Schage and AVA in 2006 and it is one of the largest property companies in Norway. It owns a 307,000 m2 property portfolio and expects to generate retail turnover of NOK 6.1 bn (EUR 670 mln) for 2015.

Schage Eiendom was previously the largest shareholder in Salto with a 57% stake. It is acquiring the shares of the remaining major shareholders Varner Kapital (26%), AVA Invest (6%) and Sportsmagasinet (5%) in a move that will give it a total holding of 94%. The remaining minority shareholders will receive the same offer to sell out to Schage.

The takeover is expected to complete in November this year. Salto shareholder Arne Vannebo will step down as CEO of Salto and be replaced by Schage's Petter Falkgard Andersen. Andersen has served on Salto's board since 2011 and is head of development.

Commenting on his impending departure Vannebo said he had learned a lot from the sales process. 'There has been great interest for the company, although the outcome of the process came as somewhat of a surprise to many of us.

'In connection with selling my shares in Salto, it is now the right time to finalise my journey in Salto and hand over the company to a new CEO. It has been greatly inspiring to build a large shopping centre company in Norway, with focus on great management and work environment. It has been a successful journey in every way, says Arne Vannebo, CEO of Salto.

Schage
Schage Eiendom has a gross value of NOK 9.7 bn (€1.1 bn) and a NAV of NOK 3.8 bn (€420 mln). The company is involved in the development of several larger projects within the office, retail and residential sectors, in addition to local urban development throughout Norway. Schage also has operations in Vilnius, Lithuania. Schage Eiendom is fully owned by Knut and Bjorn Schage and is headquartered in central Oslo.