Swedish listed real estate company Castellum announced an increased share exchange and cash offer to Entra’s shareholders and the sale of a Swedish asset portfolio at a 20% premium to book value to Blackstone.
On November 26, Castellum announced the intention to launch a share exchange and cash offer to eligible Entra ASA’s (Entra) shareholders.
Castellum said on December 18 that it has increased the consideration in the Offer by 13.9% (Revised Offer) by offering each eligible Entra shareholder 8 newly issued Castellum shares for every 13 shares in Entra and NOK 54.39 in cash per share in Entra.
”The Revised Offer values each share in Entra at NOK 185 exclusive of synergies and any profit and valuation uplift from the sale of assets to Blackstone at a material premium to book value,” said the company in a statement. The acceptance period for the Revised Offer is expected to commence on or around January 8, 2021.
Castellum signs two sale agreements with Blackstone
In connection with the Revised Offer, Castellum has signed two sale agreements with Blackstone whereby Castellum will divest of 214 mature stabilized assets, comprising primarily assets in the warehouse/logistics and light industry segments in Sweden to Arckle Holdco S.à r.l., a company affiliated to funds managed by The Blackstone Group (Blackstone) for net proceeds of SEK 18.1 billion.(appr. €1.8bn)
The 1,265,150 square meters assets will be incorporated into Blackstone’s pan-European last mile logistics platform, Mileway.
Castellum said the price of the entire portfolio exceeds the most recent valuation of the properties by 20% and implies an exit yield of 4.7%.
“Through the transactions announced today we demonstrate two things: the value of Castellum’s property portfolio, which through the sale agreement with Blackstone highlights that the market values the portfolio at a 20% premium to our book value, and that Entra’s shareholders receive significant value in a combination with Castellum. I am convinced that Castellum is the ideal long-term partner for Entra, and as a result we are increasing our bid by 13.9% and invite Entra’s shareholders to participate in the value creation from the profits from the property portfolio sale as well as from future synergies,” said Henrik Saxborn, CEO of Castellum.
”The sale will occur in two tranches with a first tranche of 39 properties for net proceeds of SEK 5.0 billion followed by sale of the second tranche, which is conditional on completion of the Revised Offer for Entra. The sale of each tranche is conditional on a restructuring for separation purposes only,” said in the statement.
”The profit and valuation uplift from the asset portfolio sale to Blackstone at a 20% premium to book value is expected to increase Castellum’s EPRA NRV by approximately SEK 8 per share upon completion of both tranches of the transaction.”
Henrik Saxborn, commented the transaction with Blackstone: “After developing and growing the warehouse/logistics and light industry portfolios, we are convinced it is the right time to crystallize a profit and divest a mature sub-portfolio at an attractive premium to book value. We will retain exposure to the warehouse/logistics and light industry asset class through existing income-generating assets, 100% of the logistics development pipeline and our logistics asset management platform.”
Mileway commented on the transaction with Castellum: “We are delighted to acquire this high-quality portfolio which will strengthen our exposure to Sweden’s largest and fastest growing markets and allow us to better support customer connectivity. We are long-term believers in the fundamental strength of the Swedish economy, and this is a natural progression as we continue to grow our last mile logistics portfolio across the region.”