In order to create a Nordic leader in public service properties such as schools and care homes, Nordic real estate firm SBB is buying rival Hemfosa for NOK23.5bn (US$2.42bn) in cash and shares.
The deal, announced on 15 November, values each Hemfosa share at NOK126.15 – a premium of 22.7% to the closing price on 14 November – and each Hemfosa preference share at NOK194.63. Hemfosa’s board has recommended the offer to its shareholders.
SBB says that the two companies’ property portfolios were complimentary, covering services such as schools, elderly care homes and municipal offices as well as a smaller number of private rental properties. It says that the deal will lead to synergies of around NOK300m per year.
SBB chief executive Ilija Batljan says: “The combined company would have an attractive and stable property portfolio characterized by exposure to the Nordic welfare states with long term leases, high occupancy rates and a diversified tenant base.”
The combined group will have property with a book value of around NOK70bn and will be the fourth largest listed real estate firm in the Nordic region after Balder, Castellum and Fabege.
SBB says that it will issue around NOK1.5bn in new shares as part of the acquisition plan.