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– It is very difficult when someone has already received information and we do not have the same access to information, says CEO Ilija Batljan to DN.
On Wednesday, Samhällsbyggnadsbolaget i Norden (SBB) announced that it will withdraw its takeover bid for Norwegian Entra. The Swedish real estate developer announced in late November that it would bid NOK 165 per share, which values Entra at just over NOK 30 billion.
A few days later, Swedish competitor Castellum jumped into the fight with an offer of 170.86 kroner per share. SBB stood firm and thought their offer was the best as it equaled more cash for shareholders.
Now SBB is withdrawing because the company believes that it will not receive the same information as Castellum in the due diligence process.
– We receive meaningless explanations that they compete with us. We have community buildings and almost only kindergartens in Norway. The companies’ portfolios complement each other well, says Batljan.
“Evaluation in a hurry”
SBB’s withdrawal from the offering comes on the same day that Entra submitted a new valuation, in which its portfolio of properties is valued at NOK 56.5 billion. This is a significant increase from a valuation of NOK 51.8 billion at the end of the third quarter.
– I have experienced this as a platform from the beginning. The most important thing to me is that I have tried to be correct and make sure that the shareholders have received the same information. This assessment shows that the Norwegian state has sold shares below the legitimate market price at the expense of Norwegian taxpayers. That’s not good, says Batljan.
– This assessment shows that the Norwegian state has sold shares below the legitimate market price at the expense of Norwegian taxpayers.
CEO Sonja Horn of Entra. (Photo: Aleksander Nordahl)
It points out that the Ministry of Commerce and Industry sold its shares to Castellum for NOK 169 per share.
– All companies carry out quarterly evaluations. Here we have an assessment that is done in a hurry and that is far superior to previous assessments. So one can wonder how they have been. “It is difficult for me to see that the development in the market during the last month has been as the plans of Entra,” he continues.
Criticize the rating
In a press release, SBB notes that the main argument for the increase in the value of Entra’s portfolio is the lower profitability in the transaction market. The Swedish company disagrees with the assessment and believes that there have only been a few relevant transactions.
‘The updated valuation is not in line with past practice and, in SBB’s opinion, is not in line with the general evolution of the market in Norway. The new information generates uncertainty with respect to what Entra has historically reported, which is what our offer has been based on, ”the report states.
Furthermore, SBB notes that in its “due diligence” process it has not had access to detailed information from Entra, arguing that SBB is a competitor of Entra on the Norwegian market.
“SBB’s Norwegian portfolio is mainly made up of kindergartens, nursing homes and other places where Entra is not present. Therefore, SBB has not been treated fairly or given the opportunity to meet the requirements of ‘due diligence’, “the Swedish company writes in the report.
Come in, fight back
Entra Chairman Siri Hatlen responds to SBB’s remarks in a public listing.
– It is important for the board to emphasize that SBB has had the same access to information on Entra, in a computer room, as other stakeholders. SBB, as well as other interested parties, was also offered access to Entra’s advice and management, including to discuss the updated valuation, according to Hatlen in the stock exchange announcement.
– Until today’s report, after the start of its review, SBB has not raised any objections, neither on the content of the information provided nor on the degree of access to the information or the company, it continues.
In the stock exchange announcement, the chairman of the board, Hatlen, says the following about the new valuation:
– Regarding the updated valuation, the motivation of the board has been to ensure that relevant and updated information is available to shareholders and the market. The updated valuation was performed by the same appraisers and in accordance with the same principles as previous valuations, and the overall market outlook is also supported by other leading commercial real estate analysts. The Board of Directors is committed to the updated valuation and its recommendations and previous evaluations related to the offers presented and announced, and will continue to focus exclusively on the common interests of the shareholders and Entra.
The stock is falling
Before SBB submitted an offer for Entra, the stock was trading for around 143 NOK. After Swedish companies jumped into the fray, it rose to more than 170 crowns.
The new valuation sent the stock higher to NOK 187, before falling sharply to NOK 172.8 after SBB withdrew its offering.
Entra’s new valuation on Wednesday came “in light of the strategic interest associated with Entra and the offers made to the company and its shareholders,” the company wrote in a stock exchange statement.(Terms)Copyright Dagens Næringsliv AS and / or our suppliers. We would like you to share our cases via a link, which leads directly to our pages. Copying or other use of all or part of the content can only be done with written permission or as permitted by law. For more terms, see here.
