SBB to launch voluntary tender offer to acquire Entra ASA

STOCKHOLM: Samhällsbyggnadsbolaget i Norden AB (SBB) announced its intention to launch a voluntary tender offer to acquire all the outstanding shares in Entra ASA to create the leading European social infrastructure player.

The Entra shares are traded on the Oslo Exchange under ticker “ENTRA”. www.entra.no

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 and NOK 49.5 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.

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:

* 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;

* 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;

*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;

*A robust balance sheet, with improved credit metrics; well positioned to reach the target of BBB+ during 2021;

*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

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.”

“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.”

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.

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.

The Offer also provides Entra shareholders with the opportunity to participate in the strategic and financial benefits of the combination through the Share Consideration.

SBB believes the combined company, with a substantially larger portfolio of approximately SEK 131 billion in Gross Asset Value as of 30 September 2020 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.

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. www.sbbnorden.se