Oslo, 3 June 2024: Public Property Invest ASA ("PPI") has, on 21 May 2024,
submitted a bid to the board and shareholders of Terningen Invest AS
("Terningen") for the acquisition of up to 100% of the shares in Terningen.
Terningen owns, through subsidiaries, Terningen Arena Elverum, which consists
of 27,000 sqm of land and 20,700 sqm of buildings. The Ministry of Education
and Research is the largest and most important tenant, and the property
currently generates total annual rental income of approximately NOK 57.5
million. Many of Terningen's shareholders are also shareholders in PPI, and
PPI's objective with the bid is to strengthen its portfolio with an attractive
property, while allowing Terningen's shareholders to continue as shareholders
in PPI. PPI has secured sufficient external debt financing, and therefore
Terningen's shareholders will also benefit from PPI's low loan-to-value ratio.
Further, Terningen's future refinancing needs will be relieved.
The bid had the following main conditions:
- Property value of NOK 819 million. PPI assumed customary balance
adjustments, and the preliminary estimated equity value amounted to NOK
130,000,000. The price per share would thus be approximately NOK 13,000 per
share. The last trading of the share (approximately 6% of the shares in
Terningen) took place last week at approximately NOK 10,000 per share.
- It was proposed that the purchase price be settled by issuing shares in PPI
at a price of NOK 16.5 per share.
- It was assumed that PPI would be granted access to due diligence and that
Terningen's lender would approve the transfer.
- The bid was rejected by the board of Terningen Friday, 31 May 2024. PPI
believes that this is a transaction opportunity that has several advantages
for Terningen's shareholders and that the shareholders of Terningen should get
the opportunity to consider the bid. If a transaction is completed on the
conditions set out above, Terningen's shareholders would gain access to:
- A market-based valuation,
- Security for future financing needs,
- Continued exposure to real estate in a low-leverage property company, with
mainly public tenants, dividend capacity, and a liquid share.
Based on the above, PPI will contact Terningen's shareholders to request that
one or more shareholders in Terningen (in accordance with Article 11 of its
Articles of Association) who together own 25% or more of the company's shares,
demand a sales process in accordance with the same provision. If Terningen's
shareholders make such a decision, PPI will stand by the bid on the conditions
mentioned above, provided that PPI has been granted access to an exclusive
transaction process by 15 June 2024. Depending on the final transaction
structure, a final offer may also be subject to the publication by PPI of an
offering prospectus.
Questions related to this announcement can be directed to:
For further queries, please contact:
Ilija Batljan, interim CEO, ilija@publicproperty.no
About PPI
Public Property Invest was established in 2021 by SBB and Arctic Securities
with a long-term strategy of owning, operating, and developing socially
beneficial property in Norway. Sustainable property management is an integral
part of Public Property Invest's business.
Its portfolio of properties is characterized by strong tenants within the
public sector, such as the police, judiciary functions and public health
organizations, on long lease contracts and a high occupancy rate.
Public Property Invest's portfolio consists of more than 368,000 sqm across 61
properties which had an aggregate estimated value of around NOK 9,976 million
as of 31 December 2023. It has more than 125 public tenants in 26 cities.
Hundreds of subcontractors ensure that its tenants can fulfil their important
societal missions every day.
In the medium to long term, Public Property Invest is expected to generate NOK
690 million in normalised run-rate rental income, of which public tenants
constitute approximately 92 per cent. The company intends to be an active
consolidator in the market. With a strong balance sheet, it pursues an
opportunistic growth strategy.