European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

On 24 November, <a href="https://www.smartkarma.com/entities/entra-asa" target="_blank" data-smartkarma-citation="entities:22229:1" rel="noopener">Entra ASA (ENTRA NO)</a> rejected Swedish property company Samhällsbyggnadsbolaget i Norden AB (SBB)'s intention to launch an offer to acquire all of Entra's outstanding shares for NOK30.01 bn.
<ul>
<li>SBB had offered to pay NOK165 per share, split in NOK115.5 in cash (70% of the consideration, NOK30 bn) and NOK49.5 (30% of the consideration) in new SBB class B (non-voting) shares.</li>
</ul>
On 25 November, informal discussions regarding a potential merger between Swedish real estate company <a href="https://www.smartkarma.com/entities/castellum-ab" target="_blank" data-smartkarma-citation="entities:22321:1" rel="noopener">Castellum AB (CAST SS)</a> and Entra ended after the parties were unable to reach an agreement.
On 26 November, Castellum announced its intention to launch a rival bid for the remaining 91.8% stake in Entra for a total of NOK30.8 bn  ($3.5 billion) cash (15%) and shares (85%), exceeding the offer from rival Swedish firm SBB.
<ul>
<li>13 newly issued Castellum shares for every 20 shares in Entra (0.65 exchange ratio) and NOK 25.68 in cash per share in Entra (base case consideration), valuing each Entra share at NOK170.86, 3.5% higher than SBB's offer.</li>
<li>5.5% premium to Entra’s Q3 2020 EPRA NRV.</li>
</ul>
On 27 November, SBB formally launched its offer.
While SBB's offer is lower, it has a higher cash component, 70%, vs 15% for Castellum's. Castellum's has the support of Norwegian government, whom has agreed to sell its 8.2% in Entra to Castellum, at NOK169, in cash.
<ul>
<li>There is execution risk to Castellum's offer. Given that SBB's offer looks less risky for Entra's shareholders.</li>
<li>Neither bid appears solicited either.</li>
</ul>
Investors expect more bids: on 27 November, Entra’s shares rose 0.4% to close at NOK176.2, above the current offer price, while Castellum’s shares rose 0.3%.
The move by both Swedish real estate companies looks like an opening gambit. An improved bid could come from SBB or others, now that Entra is in play. Moreover, there's interloper risk from private equity.
<ul>
<li>An improved bid could come up to a level of NOK194 per share, 20% premium to Entra’s Q3 2020 EPRA NRV. (Castellum is trading at 15% premium to spot NAV).</li>
</ul>
Recommendation is long Entra, TP NOK194.

On 24 November, Entra ASA (ENTRA NO) rejected Swedish property company Samhällsbyggnadsbolaget i Norden AB (SBB)'s intention to launch an offer to acquire all of Entra's outstanding shares for NOK30.01 bn.

SBB had offered to pay NOK165 per share, split in NOK115.5 in cash (70% of the consideration, NOK30 bn) and NOK49.5 (30% of the consideration) in new SBB class B (non-voting) shares.

On 25 November, informal discussions regarding a potential merger between Swedish real estate company Castellum AB (CAST SS) and Entra ended after the parties were unable to reach an agreement.
On 26 November, Castellum announced its intention to launch a rival bid for the remaining 91.8% stake in Entra for a total of NOK30.8 bn  ($3.5 billion) cash (15%) and shares (85%), exceeding the offer from rival Swedish firm SBB.

13 newly issued Castellum shares for every 20 shares in Entra (0.65 exchange ratio) and NOK 25.68 in cash per share in Entra (base case consideration), valuing each Entra share at NOK170.86, 3.5% higher than SBB's offer.
5.5% premium to Entra’s Q3 2020 EPRA NRV.

On 27 November, SBB formally launched its offer.
While SBB's offer is lower, it has a higher cash component, 70%, vs 15% for Castellum's. Castellum's has the support of Norwegian government, whom has agreed to sell its 8.2% in Entra to Castellum, at NOK169, in cash.

There is execution risk to Castellum's offer. Given that SBB's offer looks less risky for Entra's shareholders.
Neither bid appears solicited either.

Investors expect more bids: on 27 November, Entra’s shares rose 0.4% to close at NOK176.2, above the current offer price, while Castellum’s shares rose 0.3%.
The move by both Swedish real estate companies looks like an opening gambit. An improved bid could come from SBB or others, now that Entra is in play. Moreover, there's interloper risk from private equity.

An improved bid could come up to a level of NOK194 per share, 20% premium to Entra’s Q3 2020 EPRA NRV. (Castellum is trading at 15% premium to spot NAV).

Recommendation is long Entra, TP NOK194.

Norway

Entra ASA is a real estate company. The Company owns, develops, and manages properties in Norway. Entra focuses on office properties, centralizing around main Norwegian cities.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Entra ASA (ENTRA NO)

Entra ASA: Competing Offers

Investors expect more bids. The move for Entra by both Swedish real estate companies looks like an opening gambit. An improved bid could come from...

Jesus Rodriguez Aguilar

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)