Blackstone offers $2 billion for Finnish real estate firm Sponda

Polar Bidco S.à r.l. , a corporation owned by funds advised by affiliates of The Blackstone Group L.P. (together with its consolidated subsidiaries, “Blackstone“), and Sponda Plc  have on June 5, 2017 entered into a combination agreement pursuant to which the Offeror will make a voluntary recommended public tender offer to purchase all issued and outstanding shares in Sponda . In the Tender Offer, Sponda shareholders will be offered a cash consideration of EUR 5.19 for each share in Sponda representing an aggregate equity purchase price of approximately EUR 1,763 million for Sponda shares.

Summary of the Tender Offer

  • The offer price is EUR 5.19 in cash for each share in Sponda (the “Offer Price“);
  • Under the Combination Agreement, Sponda has the right to distribute a dividend of a maximum of EUR 0.12 per share before the completion of the Tender Offer. The Offer Price will be adjusted downwards on a euro-for-euro basis if any such dividend were to be distributed. Should the maximum dividend of EUR 0.12 per share permitted under the Combination Agreement be distributed, the Offer Price would be adjusted to EUR 5.07 in cash on the record date of the dividend payment.
  • The Offer Price represents a premium of:
    • 28.1 percent to the three-month volume-weighted average price of Sponda share on Nasdaq Helsinki Ltd (“Nasdaq Helsinki“) up to and including June 2, 2017;
    • 20.7 percent to the closing price of Sponda share on Nasdaq Helsinki on June 2, 2017 (i.e., the last day of trading before the announcement of the Tender Offer); and
    • 1.8 percent to the EPRA NNNAV (adjusted net asset value) based on the unaudited interim report as at and for the three months ended March 31, 2017;
  • The Offer Price provides full value relative to Sponda’s IFRS net asset value based on the unaudited interim report as at and for the three months ended March 31, 2017;
  • The Board of Directors of Sponda has unanimously decided to recommend to shareholders of Sponda to accept the Tender Offer;
  • The largest shareholders of Sponda Mercator Invest Ab, HC Fastigheter Holding Oy Ab and Varma Mutual Pension Insurance Company as well as Sponda’s President and CEO Kari Inkinen, together representing approximately 46.9 percent of the shares have, subject to certain customary conditions, irrevocably undertaken to accept the Tender Offer;
  • Certain funds advised by affiliates of Blackstone have executed an equity commitment letter addressed to the Offeror confirming the financing for the payment of the aggregate Offer Price for all of the shares in Sponda in connection with the Tender Offer and in the subsequent mandatory redemption procedure;
  • The Tender Offer is subject to necessary regulatory approvals, permits and consents, including without limitation competition clearances, and the Offeror gaining control of more than 90 percent of the issued and outstanding shares and voting rights of Sponda;
  • The Offeror will, on or about June 12, 2017, publish a tender offer document with detailed information on the Tender Offer; and
  • The offer period for the Tender Offer is expected to commence on or about June 13, 2017 and initially to expire on July 14, 2017. The Offeror reserves the right to extend the offer period from time to time in accordance with the terms and conditions of the Tender Offer.

Commenting on the Tender Offer, Kaj-Gustaf Bergh, Chairman of the Board of Directors of Sponda said: “The Board of Directors of Sponda has carefully evaluated the tender offer and has unanimously decided to recommend the shareholders to accept it. The tender offer is an acknowledgement of Sponda being the prime real estate investment company in Finland with a clear focus on high-quality commercial properties in growth areas and the Helsinki Central Business District in particular. The Board of Directors of Sponda believes that the tender offer is in the best interest of all shareholders and that the offer price being equal to Sponda’s net asset value per share offers a favorable opportunity to Sponda’s shareholders.”

Commenting on the Tender Offer, Kari Inkinen, President and CEO of Sponda said: “With the support of Blackstone we will further develop our business, our properties and our portfolio. We will continue to offer high-quality business premises and working environments to our customers.”

Commenting on the Tender Offer, James Seppälä, Head of European Real Estate Acquisitions at Blackstone, said: “Our proposed acquisition represents another step in Blackstone’s long-standing strategy of investing in high-quality real estate assets and businesses across the Nordic region. We are excited about this opportunity to invest in the commercial real estate market in Finland and are delighted with the strong support that our offer has received from Sponda’s board, management and leading shareholders.”

Source: Sponda

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