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2016-10-17

Blackstone: BLACKSTONE ANNOUNCES A MANDATORY PUBLIC CASH OFFER OF SEK 100 PER SHARE TO THE SHAREHOLDERS OF D. CARNEGIE & CO

The Offer is not being made, and this press release may not be
distributed, directly or indirectly, in or into, nor will any tender
of shares be accepted from or on behalf of holders in Australia,
Canada, Hong Kong, Japan, New Zealand or South Africa, or any other
jurisdiction in which the making of the Offer, the distribution of
this press release or the acceptance of any tender of shares would
contravene applicable laws or regulations or require further offer
documents, filings or other actions in addition to those required
under Swedish law. Shareholders should refer to the offer
restrictions included in the section titled "Important information"
at the end of this press release and in the tender offer document
which will be published shortly before the beginning of the
acceptance period for the Offer. Shareholders in the United States
should also refer to the section titled "Special notice to
shareholders in the United States" at the end of this press release.
Press release 17 October 2016

Vega Holdco S.à r.l. ("Vega Holdco"), an entity wholly owned by real
estate funds advised by affiliates of the Blackstone Group L.P.
(together with its affiliates, "Blackstone"), announced on 13 October
2016 that it has acquired shares in D. Carnegie & Co AB (publ) ("D.
Carnegie & Co" or the "Company"). Vega Holdco thereby passed the
mandatory bid threshold of 30 per cent of the votes in D. Carnegie &
Co. Vega Holdco hereby announces a mandatory cash offer (the "Offer")
to the shareholders and warrant holders in D. Carnegie & Co to
acquire all outstanding A- and B-shares and warrants in D. Carnegie &
Co at a price of SEK 100.00 per share, regardless of share class, SEK
51.1 per warrant of series 2014/2017, SEK 30.3 per warrant of series
2015/2018, and SEK 13.7 per warrant of series 2016/2019. The B-shares
in D. Carnegie & Co are listed on Nasdaq Stockholm, Mid Cap.

The Offer in brief

· Vega Holdco offers SEK 100.00 in cash per A- and B-share in D.
Carnegie & Co, which is the highest price that Vega Holdco has paid
for any shares acquired in D. Carnegie & Co.[1] The total value of D.
Carnegie & Co, based on all 77,308,776 outstanding shares and
3,278,200 warrants in D. Carnegie & Co, implied by the Offer amounts
to SEK 7.8 billion.[2]

· D. Carnegie & Co has issued warrants in three series. Vega Holdco
offers SEK 51.1 in cash per warrant of series 2014/2017, SEK 30.3 in
cash per warrant of series 2015/2018 and SEK 13.7 in cash per warrant
of series 2016/2019.

· Vega Holdco holds shares in D. Carnegie & Co corresponding to 40
per cent of the voting rights and 32 per cent of the share capital in
D. Carnegie & Co.[3] In addition, Kvalitena AB ("Kvalitena") and
Frasdale Int. BV ("Frasdale") have agreed to Vega Holdco exercising
the voting rights of their remaining shares held in D. Carnegie & Co
at any given time, resulting in Vega Holdco controlling a total of 53
per cent of the voting rights in D. Carnegie & Co, based on the
shares held by Kvalitena and Frasdale in D. Carnegie & Co on the date
of this announcement.[4] Vega Holdco has also been granted a right of
first offer to the remaining shares held by Kvalitena and Frasdale,
respectively.

· There are no conditions for completion of the Offer.

· The acceptance period for the Offer is expected to commence on 20
October 2016 and end on 18 November 2016. Settlement is expected to
commence around 2 December 2016.

· Vega Holdco has funds available to finance the Offer through
equity and external financing available through its owners. Any
conditions to external financing are within Vega Holdco's control.

· The offered price represents a premium of:

- approximately 10.1 per cent compared to D. Carnegie & Co's
volume-weighted average share price for the B-shares of SEK 90.87
during the last three months up to and including 14 July 2016 (the
last day of trading prior to the announcement of the fact that Vega
Holdco had entered into agreements to acquire a major stake in D.
Carnegie & Co from Kvalitena, Frasdale and Svensk Bolig Holding AB
("SBH") at a price of SEK 100 per share (the "Pre-Acquisitions");

- approximately 23.4 per cent compared to D. Carnegie & Co's
volume-weighted average share price for the B-shares of SEK 81.05
during the last six months up to and including 14 July 2016 (the last
day of trading prior to the announcement of the Pre-Acquisitions);
and

- approximately 41.7 per cent compared to D. Carnegie & Co's
volume-weighted average share price for the B-shares of SEK 70.55
during the last twelve months up to and including 14 July 2016 (the
last day of trading prior to the announcement of the
Pre-Acquisitions).

· Blackstone also wants to highlight that the offer price of SEK 100
per share implies a 17.6 per cent premium to the latest adjusted
shareholders' equity (ERPA NAV) per share value.[5]

Background and reasons for the Offer

On 15 July 2016, it was announced that Vega Holdco had entered into
agreements to acquire shares in D. Carnegie & Co, subject to certain
conditions, corresponding to 40 per cent of the voting rights and 32
per cent of the share capital in D. Carnegie & Co[6] from Kvalitena,
Frasdale and SBH (the "Pre-Acquisitions"). In addition, Kvalitena and
Frasdale agreed, subject to the completion of the aforementioned
acquisitions, to Vega Holdco exercising the voting rights of their
remaining shares held in D. Carnegie & Co at any given time,
resulting in Vega Holdco controlling a total of 53 per cent of the
voting rights in D. Carnegie & Co, based on the shares held by
Kvalitena and Frasdale in D. Carnegie & Co on the date of this
announcement. Vega Holdco has also been granted a right of first
offer to the remaining shares held by Kvalitena and Frasdale,
respectively.

On 25 August 2016, Vega Holdco announced that all conditions to
completion of the Pre-Acquisitions had been fulfilled and on 13
October 2016, Vega Holdco announced that all the Pre-Acquisitions had
been completed. Through the completion of the Pre-Acquisitions, Vega
Holdco passed the mandatory bid threshold of 30 per cent of the votes
in D. Carnegie & Co.

The Offer will provide full liquidity to shareholders, allowing
shareholders to sell sizeable shareholdings at the offer price. This
may otherwise not be possible given the generally low market trading
volumes.

Reasons for the Offer

Blackstone views the transaction as an opportunity to invest in a
leading Swedish property company with a unique business model and a
positive history of social engagement. Blackstone believes that its
financial resources and global real-estate expertise can complement
the existing business.

Blackstone looks forward to working with D. Carnegie & Co's management
and its larger stakeholders in continuing to develop the business in
line with its current strategy.

Blackstone does not foresee any material changes with regard to D.
Carnegie & Co's operational sites and its management and employees,
including their terms of employment.

The Offer

Vega Holdco offers all shareholders in D. Carnegie & Co SEK 100.00 in
cash per A- and B-share,[7] and SEK 51.1 in cash per warrant to the
holders of warrants of series 2014/2017, SEK 30.3 in cash per warrant
to the holders of warrants of series 2015/2018 and SEK 13.7 in cash
per warrant to the holders of warrants of series 2016/2019.[8] The
value of the Offer, based on the 52,749,397 shares and 3,278,200
warrants in D. Carnegie & Co not directly or indirectly held by Vega
Holdco, amounts to approximately SEK 5.4 billion. The total value of
D. Carnegie & Co, based on all 77,308,776 outstanding shares and
3,278,200 warrants in D. Carnegie & Co, implied by the Offer amounts
to SEK 7.8 billion.

The offered price represents a premium of:[9]

- approximately -2.4 per cent compared to D. Carnegie & Co's share
price for the B-shares of SEK 102.50 on 14 October 2016 (being the
last day of trading prior of the announcement of the Offer (which in
Vega Holdco's opinion has been affected by the announcement of the
Pre-Acquisitions));

- approximately 10.1 per cent compared to D. Carnegie & Co's
volume-weighted average share price for the B-shares of SEK 90.87
during the last three months up to and including 14 July 2016 (the
last day of trading prior to the announcement of the
Pre-Acquisitions);

- approximately 23.4 per cent compared to D. Carnegie & Co's
volume-weighted average share price for the B-shares of SEK 81.05
during the last six months up to and including 14 July 2016 (the last
day of trading prior to the announcement of the Pre-Acquisitions);
and

- approximately 41.7 per cent compared to D. Carnegie & Co's
volume-weighted average share price for the B-shares of SEK 70.55
during the last twelve months up to and including 14 July 2016 (the
last day of trading prior to the announcement of the
Pre-Acquisitions).

Blackstone also wants to highlight that the offer price of SEK 100 per
share implies a 17.6 per cent premium to the latest adjusted
shareholders' equity (ERPA NAV) per share value.[10]

The acceptance period for the Offer is expected to commence on 20
October 2016 and end on 18 November 2016. Settlement is expected to
commence around 2 December 2016.

Shareholders and warrant holders of D. Carnegie & Co will not be
entitled to withdraw submitted acceptances.

No commission will be charged in connection with the Offer.

Vega Holdco's shareholding in D. Carnegie & Co

Vega Holdco holds in total 3,676,190 A-shares and 20,883,189 B-shares
in D. Carnegie & Co, corresponding to 40 per cent of the voting
rights and 32 per cent of the share capital in the Company. In
addition, Kvalitena and Frasdale agreed to Vega Holdco exercising the
voting rights of their remaining shares held in D. Carnegie & Co at
any given time, resulting in Vega Holdco controlling a total of 53
per cent of the voting rights in D. Carnegie & Co, based on the
shares held by Kvalitena and Frasdale in D. Carnegie & Co on the date
of this announcement.[11] Vega Holdco has also been granted a right
of first offer to the remaining shares held by Kvalitena and
Frasdale, respectively. Apart from the above, Vega Holdco does not
hold any financial instruments or warrants that give financial
exposure to D. Carnegie & Co shares, neither has Vega Holdco acquired
or agreed to acquire any financial instruments that give financial
exposure to D. Carnegie & Co shares.

None of the shares held by Vega Holdco in D. Carnegie & Co have been
acquired at a price which is higher than the consideration in the
Offer, regardless of share class.

Vega Holdco may acquire, or enter into arrangements to acquire,
additional shares or warrants in D. Carnegie & Co outside the Offer.<...

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