Hafslund - The Board of Directors recommends not to accept the announced offer from the City of Oslo
The Board of Directors of Hafslund ASA recommends the shareholders not to accept the offer from the City of Oslo amounting to NOK 96.75 per share. In the view of the Board of Directors, the Company's underlying value is significantly higher than the offer price.
On 3 July 2017, the City of Oslo, acting through its wholly-owned company Oslo Energi Holding AS, put forward an offer for all shares in Hafslund ASA at an offer price of NOK 96.75 per Class A and Class B share. The offer period expires on 28 July 2017.
In connection with the announcement of the forthcoming offer on 26 April 2017, the Board of Directors of Hafslund ASA, in conformity with the Norwegian Code of Practice for Corporate Governance (the NUES recommendation) and the Company's own Principles of Corporate Governance, requested an independent valuation from SpareBank 1 Markets. The valuation report and the preliminary statement of the Board of Directors was made public through a stock exchange release on 20 June 2017.
Sparebank 1 Markets concluded that the Company's underlying value per share is NOK 139 based on currently expected transaction values and NOK 168 based on discounted expected future cash flows.
In its preliminary statement, the Board of Directors said that Sparebank 1 Markets' valuations were in line with the Company's own assessments, and that the underlying value per share was significantly higher than the offer price of NOK 96.75.
- Nothing has happened since then that changes this view, and the offer price is the same, says Birger Magnus, Chairman of the Board of Directors of Hafslund.
In assessing the offer, in addition to the difference between the offer price and SpareBank 1 Markets' views on the underlying values, the shareholders will have to take into account that the outcome of a judicial valuation is associated with significant uncertainty, and that the settlement will be substantially delayed if the price is determined by judicial valuation. Information about the judicial valuation will be provided on www.hafslund.no.
Given the significant discrepancy between SpareBank 1 Markets' valuation and Company's own valuations on the one hand, and the offer price on the other hand, it is the Board of Directors' opinion that the possibility of obtaining a higher price per share through a judicial valuation clearly outweighs for the risk associated with the outcome of a legal process.
- Accordingly, it is the Board of Directors' consolidated assessment that it will be in the shareholders' economic interest not to accept the offer, but instead let the price be fixed by judicial valuation, says Birger Magnus, Chairman of the Board of Directors of Hafslund.
All members of the Board of Directors who own shares in the Company, as well as the CEO, intend not to accept the offer.
Oslo, 10 July 2017
For further information
Chairman of the Board at Hafslund ASA, Birger Magnus, phone no. 900 30 093, e-mail: Birger.Magnus@kov5.no