Klövern AB (publ): Klövern announces a public cash offer to the shareholders of Agora

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, South Africa or the United States 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 measures in addition to those required under Swedish law.

Klövern AB (publ) (“Klövern“), through its indirectly wholly-owned subsidiary Dagon Sverige AB (the “Offeror“), hereby announces a public cash offer to the shareholders of A Group of Retail Assets Sweden AB (publ) (“Agora“) to transfer all ordinary Class A and Class B shares and preference shares in Agora to the Offeror (the “Offer“). The ordinary Class B share and the preference share in Agora are traded on Nasdaq Stockholm First North (“First North“).

The Offer in brief

• The shareholders in Agora are offered SEK 30.00 in cash per ordinary Class A and Class B share, and SEK 275.00^[1] per preference share in Agora.^[2]
• The Offer Price represents a premium of:
  • 59.6 per cent for ordinary Class A and Class B shares and 6.6 per cent for preference shares in relation to the closing price for the ordinary Class B share and the preference share on First North on 4 October 2018, which is the last day of trading prior to the announcement of the Offer, and
  • 64.9 per cent for ordinary Class A and Class B shares and 6.5 per cent for preference shares based on the volume weighted average price for the ordinary Class B share and the preference share on First North during a period of twenty (20) trading days prior to the announcement of the Offer.
• At the announcement of the Offer, the Offeror owns 2,909,342 ordinary Class B shares in Agora representing approximately 9.3 per cent of the share capital and 4.0 per cent of the votes in Agora.  
• Shareholders in Agora representing approximately 76.0 per cent of the shares and 89.8 per cent of the votes in Agora have irrevocably undertaken to accept the Offer, and shareholders in Agora representing approximately 8.4 per cent of the shares and 3.6 per cent of the votes have stated that they are positive to the Offer.
• The Offeror’s current holdings together with shares covered by irrevocable undertakings and positive statements on the Offer, correspond in total to approximately 93.7 per cent of the shares and 97.3 per cent of the votes in Agora. 
• The acceptance period of the Offer is expected to commence on 12 October 2018 and end on 9 November 2018.
• The Board of Agora will obtain and publish a fairness opinion, which will be published no later than two weeks before the end of the acceptance period.
• Completion of the Offer is conditional upon, inter alia, the Offer being accepted to such an extent that the Offeror becomes the owner of shares representing more than ninety (90) per cent of the outstanding shares in Agora, and receipt of all necessary governmental clearances, including from competition authorities.

Background to and reasons for the Offer

Agora was established in 2015 and was the same year acquired by a number of real estate companies, of which Klövern through the Offeror was one. The acquiring companies received shares through an issue in kind, where properties for a total value of approximately SEK 1.8 billion were used as consideration. The newly established company focused on owning and managing retail properties in Swedish regional cities. The Offeror has since the establishment retained its shares in Agora. On 30 June 2018, the property portfolio in Agora consisted of 21 properties with a lettable area of approximately 242,049 square meters and a rental value of SEK 422 million. The property value in Agora amounted to SEK 4,263 million. Agora’s properties are centrally located in each city.

In the light of increasing digitalization and e-commerce, Agora has increasingly focused its letting activities on tenants other than traditional retailers in order to gradually achieve a broader mix of tenants in office, education, service, groceries and restaurants.

A significant part of Agora’s properties are located in cities where Klövern is already present, namely Västerås, Malmö, Örebro and Kalmar/Växjö. Klövern has a strong and locally based organization in these cities that can focus on the letting activities and subsequently accelerate the change from pure retail to meeting venues. The centrally located properties in Västerås have great development potential, which strengthens Klövern’s position as a city developer. The acquisition also strengthens Klövern’s position in Malmö, Örebro, Kalmar and Växjö. Agora’s properties in other cities are intended to be divested.

The terms of the Offer means an implicit property value for the property portfolio, which corresponds to a substantial discount to book value.

Except as stated above regarding the intention to divest certain of Agora’s properties, the Offeror does not expect any significant changes as a result of the acquisition with regard to Agora’s management and employees (including terms of employment) or for the employment and activities in the places where Agora operates. After completion of the Offer, a careful review of the combined business will take place in order to evaluate how the new group can be structured and developed in the best way.

The Offer
The Offeror offers the shareholders in Agora SEK 30.00 in cash per ordinary Class A and Class B share in Agora, and SEK 275.00 in cash per preference share in Agora that is not already owned by the Offeror.^[3] No commission will be charged in connection with the Offer.

Agora’s ordinary share of Class A is not traded on a regulated market or multilateral trading facility (MTF). The market value of the listed ordinary Class B share in Agora shall according to the Takeover Rules for certain trading platforms, effective as of 1 April 2018 and issued by the Swedish Corporate Governance Board (the “Takeover Rules“), be applied to the non-listed ordinary share of Class A in Agora.

The total number of shares in Agora is 31,146,713, of which 4,689,062 ordinary Class A shares, 26,094,011 ordinary Class B shares, and 363,640 preference shares. At the announcement of the Offer the Offeror owns 2,909,342 ordinary Class B shares in Agora. In total, the Offer comprises the 28,237,371 shares that are not already owned by the Offeror, of which 4,689,062 ordinary Class A shares, 23,184,669 ordinary Class B shares, and 363,640 preference shares in Agora.

Bid premium
The Offer represents a premium of approximately 59.6 per cent for the ordinary Class A and Class B shares in Agora in relation to the latest closing price on First North on 4 October 2018, for the ordinary Class B share, and a premium of approximately 6.6 per cent for the preference shares in Agora in relation to the latest closing price on First North on 4 October 2018, for the preference share. Further, the Offer represents a premium of approximately 64.9 per cent for the ordinary Class A and Class B shares in Agora in relation to the volume weighted average price of the ordinary Class B share during a period of twenty (20) trading days prior to the announcement of the Offer, and a premium of approximately 6.5 per cent for the preference shares in Agora in relation to the volume weighted average price of the preference share during a period of twenty (20) trading days prior to the announcement of the Offer.

Total value of the Offer
The offered value for all ordinary Class A and Class B shares in Agora included in the Offer amounts to SEK 836 million and the offered value for all preference shares in Agora included in the Offer amounts to SEK 100 million, corresponding to a total value of the Offer of SEK 936 million. The Offer values all shares in Agora, including the shares held by the Offeror, to an amount of SEK 1,023 million.

Commitments from shareholders in Agora
Klövern has received irrevocable undertakings to accept the Offer from the following shareholders in Agora (“Selling Shareholders“):

• M2 Asset Management AB, whose total ownership amounts to 2,344,531 ordinary Class A shares, 4,783,943 ordinary Class B shares and 88,872 preference shares, corresponding to approximately 23.2 per cent of the shares and approximately 38.6 per cent of the votes in Agora,
• Kvalitena AB, whose total ownership amounts to 2,344,531 ordinary Class A shares, 2,664,062 ordinary Class B shares and 26,400 preference shares, corresponding to approximately 16.2 per cent of the shares and approximately 35.6 per cent of the votes in Agora,
• Kåpan Pensioner Försäkringsförening, whose total ownership amounts to 4,490,391 ordinary Class B shares, corresponding to approximately 14.4 per cent of the shares and approximately 6.1 per cent of the votes in Agora,
• Fastighets AB Balder, whose total ownership amounts to 2,300,000 ordinary Class B shares, corresponding to approximately 7.4 per cent of the shares and approximately 3.1 per cent of the votes in Agora,
• Länsförsäkringar Fonder, whose total ownership amounts to 1,687,500 ordinary Class B shares, corresponding to approximately 5.4 per cent of the shares and approximately 2.3 per cent of the votes in Agora,
• Sterner Stenhus Förvaltning AB, whose total ownership amounts to 1,393,167 ordinary Class B shares, corresponding to approximately 4.5 per cent of the shares and approximately 1.9 per cent of the votes in Agora,
• Solisto S.A., whose total ownership amounts to 843,996 ordinary Class B shares, corresponding to approximately 2.7 per cent of the shares and approximately 1.2 per cent of the votes in Agora,
• Lipid AB, whose total ownership amounts to 516,226 ordinary Class B shares, corresponding to approximately 1.7 per cent of the shares and approximately 0.7 per cent of the votes in Agora, and
• P&E Persson AB, whose total ownership amounts to 188,948 ordinary Class B shares, corresponding to approximately 0.6 per cent of the shares and approximately 0.3 per cent of the votes in Agora.

Klövern and the Offeror have thus, through irrevocable undertakings by shareholders to accept the Offer, and through the Offeror’s existing holdings, secured acceptance from shareholders representing in total 4,689,062 ordinary Class A shares, 21,777,575 ordinary Class B shares and 115,272 preference shares, which corresponds to approximately 85.3 per cent of the shares and 93.8 per cent of the votes in Agora.

Further, D. Carnegie & Co. Aktiebolag, whose total ownership amounts to 2,606,832 ordinary Class B shares, corresponding to approximately 8.4 per cent of the shares and approximately 3.6 per cent of the votes in Agora, has stated that they are positive to the Offer. The Offeror’s current holdings together with shares covered by irrevocable undertakings and positive statements on the Offer, amounts to in total 4,689,062 ordinary Class A shares, 24,384,407 ordinary Class B shares and 115,272 preference shares, corresponding to approximately 93.7 per cent of the shares and 97.3 per cent of the votes in Agora.

In the event that the Offeror, at the latest by 31 March 2019 and as stipulated in the agreement, divests shares submitted to the Offer by the Selling Shareholder at a higher price per share than the Offer price (“Resale“), the Offeror has undertaken to pay an additional purchase price to the Selling Shareholders which shall correspond to half of the difference between the price in the Offer and the price in the Resale. In the event that the Offeror increases the price paid to the Selling Shareholders in accordance with this obligation in connection with a Resale, the Offeror undertakes to make a corresponding increase of the price in the Offer to other Shareholders in Agora who have accepted the Offer.

Conflicts of interest
Agora’s board member Rutger Arnhult is also shareholder, board member and CEO of Klövern as well as chairman of the Offeror. This means that the Offer is subject to the rules on conflicts of interest in section II.18-II.19 and Section IV of the Takeover Rules which stipulates, inter alia, that the Board of Agora must obtain and publish a fairness opinion from independent experts regarding the Offer and that the acceptance period in the Offer shall be at least four weeks.

Furthermore, Rutger Arnhult owns all shares in M2 Asset Management AB, and Agora’s board member Patrik Essehorn is a board member of M2 Asset Management AB, who, as major shareholder in Agora, has irrevocably undertaken to the Offeror to accept the Offer. Agora’s Chairman, Knut Pousette, is the CEO of Kvalitena AB, who, as major shareholder in Agora, has irrevocably undertaken to the Offeror to accept the Offer.

The above means that Rutger Arnhult, Knut Pousette and Patrik Essehorn are prevented from participating in the Agora Board’s handling and decision making on matters related to the Offer. Due to Rutger Arnhult’s position in Agora, the Offeror and in Klövern, Rutger Arnhult has not participated in Klövern’s and the Offeror’s boards’ handling and decision making on matters related to the Offer.

Fairness opinion
The board in Agora is not quorate, due to that only one of the board members in Agora is able to participate in the board’s handling and decision making in relation to the Offer. The board in Agora will therefore obtain and publish a fairness opinion. According to the Takeover Rules the fairness opinion shall be published no later than two (2) weeks before the end of the acceptance period, that is on 26 October 2018 at the latest, and will be available at Agora’s website, www.agoraretail.se.

The Offeror’s ownership in Agora
At the announcement of the Offer, the Offeror owns 2,909,342 ordinary Class B shares in Agora corresponding to approximately 9.3 per cent of the shares and 4.0 per cent of the votes in Agora.

Neither Klövern nor the Offeror has acquired any shares in Agora during the last six months prior to the announcement of the Offer. Neither Klövern nor the Offeror hold or control other financial instruments in Agora carrying a financial exposure equivalent to a shareholding in Agora at the announcement of the Offer.

During the acceptance period of the Offer, Klövern or the Offeror may acquire, or enter into arrangements to acquire, shares in Agora. All such purchases or arrangements will be in accordance with the Takeover Rules and Swedish law and be disclosed in accordance with applicable rules.

About the Offeror and Klövern in brief
Dagon Sverige AB (The Offeror) is a Swedish limited liability company with registration number 556473-1213 and has its registered office in Nyköping, Box 1024, 611 29 Nyköping. The Offeror is an indirect wholly-owned subsidiary of Klövern AB (publ), conducting acquisitions, divestments as well as managing real estate. Klövern is listed on Nasdaq Stockholm. For more information about Klövern, visit kelly.corem.se.

The financing of the Offer
The Offer is not subject to any financing conditions. The Offeror will finance the Offer through cash and available credit facilities via Klövern.

Due Diligence
The Offeror has, in connection with the preparations for the Offer, conducted a limited due diligence review of confirmatory nature regarding commercial, financial and legal information in relation to Agora. Agora has confirmed that no information which has not been published by the date of this announcement and which can reasonably be expected to affect the price of Agora’s shares has been disclosed to the Offeror during the course of the due diligence process.

Preliminary timetable
Publication of offer document: 11 October 2018
Acceptance period: 12 October 2018 – 9 November 2018
Settlement date: around 16 November 2018

The acquisition of Agora requires the approval by competition authorities. The Offeror will file the transaction shortly after its announcement and relevant clearances are expected to be obtained prior to the end of the acceptance period.

The Offeror reserves the right to extend the acceptance period and to bring forward or postpone the settlement date regarding the Offer.

Conditions to the Offer
Completion of the Offer is conditional upon:

1. the Offer being accepted to such an extent that the Offeror becomes the owner of shares representing more than ninety (90) per cent of the outstanding shares in Agora;
2. with respect to the Offer and the acquisition of Agora, receipt of all necessary regulatory, governmental or similar clearances, approvals and decisions, including from competition authorities, in each case on terms which, in the Offeror’s opinion, are acceptable;
3. no other party announcing an offer to acquire shares in Agora on terms that are more favorable to the shareholders of Agora than the Offer;
4. neither the Offer nor the acquisition of Agora being rendered wholly or partially impossible or significantly impeded as a result of legislation or other regulation, any decision of a court or public authority, or any similar circumstance;
5. no circumstances having occurred which could have a material adverse effect or could reasonably be expected to have a material adverse effect on Agora’s financial position or operation, including Agora’s sales, results, liquidity, equity ratio, equity or assets;
6. no information made public by Agora or disclosed by Agora to the Offeror being inaccurate, incomplete or misleading, and Agora having made public all information which should have been made public; and
7. Agora not taking any action that is likely to impair the prerequisites for making or completing the Offer.

The Offeror reserves the right to withdraw the Offer in the event that it is clear that any of the above conditions is not satisfied or cannot be satisfied. However, with regard to conditions ii)-vii), the Offer may only be withdrawn where the non-satisfaction of such condition is of material importance to the Offeror’s acquisition of Agora. 

The Offeror reserves the right to waive, in whole or in part, one, several or all of the conditions set out above, including, with respect to condition i), to complete the Offer at a lower level of acceptance.

Compulsory acquisition and de-listing
In the event that the Offeror, whether in connection with the Offer or otherwise, becomes the owner of shares representing more than ninety (90) per cent of the outstanding shares in Agora, the Offeror intends to commence a compulsory acquisition procedure under the Swedish Companies Act to acquire all remaining shares in Agora. In connection therewith, the Offeror intends to promote a delisting of the ordinary Class B share and preference share in Agora from First North.

Important information about LEI and NID at acceptance
According to MiFID II and starting from 3 January 2018, all investors must have a global identification code in order to conduct a securities transaction. These regulations require legal entities to apply for registration of a LEI code (Legal Entity Identifier code) and natural persons need to find their National ID or NID number (National Client Identifier number) in order to accept the Offer. Please note that it is the shareholder’s legal status that determines whether a LEI code or NID number is required, and that the issuing agent may be prevented from performing the transaction on behalf of the person in question if a LEI code or NID number (as applicable) is not provided.

Legal persons who need to obtain a LEI code may contact one of the suppliers available on the market. Through this link approved institutions for the global LEI system can be found: www.gleif.org/en/about-lei/how-to-get-an-lei-find-lei-issuing-organizations.

As for natural persons who only have Swedish citizenship, the NID number consists of the designation “SE” followed by the person’s social security number. If the person in question has more or anything other than Swedish citizenship, the NID number may be any other type of number.

Apply for registration of a LEI code (legal persons) or find out the NID number (natural persons) in good time since this information is required in the application form upon acceptance of the Offer.

Applicable law, disputes etc.
Swedish law, the Takeover Rules and the Swedish Securities Council’s rulings regarding interpretation and application of the Takeover Rules apply in relation to the Offer. The courts of Sweden shall have exclusive jurisdiction over any dispute arising out of or in connection with the Offer and the City Court of Stockholm shall be the court of first instance.

Advisors
JLL and Swedbank are acting as financial advisors and Vinge is acting as legal advisor to the Offeror and Klövern in relation to the Offer.

For additional information, please contact:
Pia Gideon, Chairman of the Board, +46 (0) 76-768 00 76, pia.gideon@gmail.com
Peeter Kinnunen, Head of Transactions, +46 (0) 76 855 67 03, peeter.kinnunen@klovern.se
Lars Norrby, IR, +46 (0) 76-777 38 00, lars.norrby@klovern.se

Klövern is a real estate company committed to working closely with customers to offer them attractive premises in growth regions. Klövern is listed on Nasdaq Stockholm. For further information, see kelly.corem.se. 

Klövern AB (publ), Bredgränd 4, 111 30 Stockholm. Phone: +46 (0)10-482 70 00. E-mail: info@klovern.se.

This information is information that Klövern AB (publ) and the Offeror is obliged to make public pursuant to the EU Market Abuse Regulation and the Takeover Rules. The information was submitted for publication, through the agency of the contact persons set out above, on 4 October 2018, at 18:30 CEST.

Important notice
This is a translation of the original Swedish language press release. In the event of discrepancies, the original Swedish wording shall prevail.

The distribution of this press release and any related offer documentation in certain jurisdictions may be restricted or affected by the laws of such jurisdictions. Accordingly, copies of this communication are not being, and must not be, mailed or otherwise forwarded, distributed or sent in, into or from any such jurisdiction. Therefore, persons who receive this communication (including, without limitation, nominees, trustees and custodians) and are subject to the laws of any such jurisdiction will need to inform themselves about, and observe, any applicable restrictions or requirements. Any failure to do so may constitute a violation of the securities laws of any such jurisdiction.  To the fullest extent permitted by applicable law, the Offeror and Klövern disclaims any responsibility or liability for the violations of any such restrictions by any person.

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, South Africa or the United States 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 measures in addition to those required under Swedish law.

Statements in this press release relating to future status or circumstances, including statements regarding future performance, growth and other trend projections and the other benefits of the Offer, are forward-looking statements. These statements may generally, but not always, be identified by the use of words such as “anticipates”, “intends”, “expects”, “believes”, or similar expressions. Forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There can be no assurance that actual results will not differ materially from those expressed or implied by these forward-looking statements due to many factors, many of which are outside the control of the Offeror, Klövern and Agora. Any such forward-looking statements speak only as of the date on which they are made and the Offeror and Klövern has no obligation (and undertakes no such obligation) to update or revise any of them, whether as a result of new information, future events or otherwise, except for in accordance with applicable laws and regulations.