GLITNIR ACQUIRES MAJORITY IN THE LISTED FIM GROUP IN FINLAND
FIM Group Corporation Press Release 5 February, 2007 at 9.05 a.m Finnish time
GLITNIR ACQUIRES MAJORITY IN THE LISTED FIM GROUP IN FINLAND
FIM’s strong position in asset management will benefit Glitnir’s growth strategy
Not for distribution in the United States
Helsinki, Reykjavik, Oslo - 5 February 2007 - Glitnir banki hf. today announced its intention to make a public tender offer for the shares in FIM Group Corporation in Finland. Glitnir has received an undertaking from the 11 major owners of FIM, who currently hold 68.1 percent of FIM, to sell their shares to Glitnir. Glitnir has further announced its intention to make a public offer to acquire all the remaining shares in the company. FIM is a leading asset management firm in Finland with a strategy to grow internationally in the fund management, brokerage and corporate advisory segments. FIM and Glitnir will have a total of EUR 8.5 billion in assets under management in 46 different mutual and investment funds internationally. Combined Glitnir and FIM will be the third largest broker, as ranked by market share of total trading turnover, in the aggregate Nordic equity market. Together there will be 36 research analysts covering 216 companies. Glitnir will have 40 percent of its employees outside of Iceland, after this transaction, counting FIM’s 284 employees.
The consideration offered is 8.00 EUR per share, representing a market capitalization of EUR 341 million, paid as a combination of cash and new shares in Glitnir or cash only. The value of the Glitnir shares is ISK 24.8 per share being the closing price on the Icelandic Stock Exchange on 15 January 2007. The ISK/EUR exchange rate is 91.44 being the mid rate published by the Icelandic Central Bank on 16 January 2007. Glitnir will finance the deal with equity issuance and with use of cash. Glitnir is well capitalized for this transaction, pro-forma CAD ratio will stand at 14.6 and Tier 1 at 10.3 percent post acquisition, given that Tier 1 and CAD ratios stood at 10.8 percent and 15.0 percent respectively at the end of 2006.
FIM is a leading Finnish investment services group that offers asset management, brokerage and investment banking services for private clients and institutions. Glitnir is a leading Nordic financial group whose services include retail, leasing, corporate and investment banking, brokerage services and asset management. FIM has an experienced and highly recognised asset management team with a total of EUR 3 billion in assets under management with approximately EUR 2 billion in 31 mutual funds. Following Morningstar classification method, 83 percent of the assets in mutual funds are allocated in equity funds, 3 percent in balanced funds, 12 percent in fixed income funds, and 2 percent in alternative investment funds. Of the 12 rated equity and balanced funds, 7 have a 5 star Morningstar rating.
The acquisition of FIM will be a continuation of Glitnir’s recent actions for expanding its geographic platform in the Nordic investment services market. As for Asset Management it will establish the foundation of an international asset management unit within Glitnir. Combined Glitnir will increase it’s assets under management of 50 percent or to EUR 8.2 billion.
FIM has been a forerunner in investing in emerging markets and it was the first Finnish investment services company to launch mutual funds that invested in the BRIC-countries (Brazil, Russia, India and China). Since 2004 FIM has had its own operation in Moscow.
Together, Glitnir Securities in Norway, Glitnir AB in Sweden and FIM both in Finland and Sweden will comprise a strong team in the Nordic brokerage market. Combined Glitnir and FIM will increase their equity brokerage reach and currently rank the third largest in OMX (also including Oslo) Nordic Stock Exchanges, in equity volume. Glitnir and FIM will have strong research coverage in Finland, in addition to Glitnir’s research capacity in Sweden, Norway and Iceland. The combined 36 research analysts in FIM and Glitnir will be covering 216 companies. Glitnir’s share of the overall Nordic market will increase from 4.91 percent to 5.6 percent with FIM consolidated into the 2006 market share.
The transaction is subject to inter alia approval by the Finnish and Icelandic Financial Supervisory Authorities and Competition Authorities in relevant jurisdictions.
Bjarni Ármannsson, CEO, Glitnir comments:
"FIM is a strategic complement to our overall growth strategy. It has a solid share in the Finnish market, a strong client base, and we plan to build further on the company’s position as a leading Nordic investment services company with focus on asset management, brokerage service and corporate advisory. We also see that it will enhance our product range in many areas where FIM has a very strong track record FIM’s strong research coverage will facilitate volume into Finland through Glitnir. Glitnir and FIM will have access to in-house research material, knowledge and deal flow in Norway, Sweden, Finland, Iceland and Russia. FIM’s domestic retail base and Glitnir’s international clients have interest and appetite in the Russian market. This is the first acquisition where we use Glitnirs shares as a significant part of the payment and for us this is a very important part of the transaction. The acquisition strengthens Glitnir’s position in the Nordic region and provides the bank with a platform for further profitable growth", commented Bjarni Ármannsson, CEO of Glitnir".
Risto Perttunen, CEO of FIM Group:
"FIM has a business portfolio that combines profitable growth of the existing businesses and investments in future growth areas. During its twenty years of operation FIM has grown from a small entrepreneurial niche service provider to a mid-sized integrated investment services company. As a forerunner for investments into emerging markets and with its subsidiary in Moscow FIM has become a leading Finnish investment services group with emphasis on emerging markets. FIM also has a brand that is well recognised among Finnish institutions and private customers. We see that Glitnir and FIM have quite similar industrial logics and strongly believe that our businesses complement each other well. In addition to that we believe that FIM’s expertise in the emerging markets and Glitnir’s strong presence in the Nordic investment services market open new opportunities for the combined new company", Mr. Perttunen said in a comment.
Frank O. Reite, Executive Vice President of Glitnir Markets:
"Glitnir intends to grow and develop the company’s core expertise, as we have done successfully in our acquisitions in Norway and Sweden. The acquisition of approximately 70 percent of the shares in FIM and thus a combined team of 54 corporate advisors located in 5 countries will enhance our corporate advisory capabilities in the Nordic region" said Frank O. Reite, Executive Vice President of Glitnir Markets. "We plan to strengthen FIM in key areas and to establish close cooperation in various fields with both Glitnir Securities in Norway, Markets Reykjavík and Glitnir AB in Stockholm in consolidating Glitnir’s capital markets activities in the Nordic region. Furthermore the acquisition will support and consolidate our corporate finance activities in Iceland, Norway, Denmark, Finland and UK through our total market share, distribution channels and placing power."
Glitnir Corporate Finance and Hannes Snellman Attorneys at Law Ltd advised the Bank on the transaction.
* Exchange rate as of February, 2, 2007: EUR/ISK 89,13
For further information, please contact:
Bjarni Ármannsson, CEO, Glitnir, phone +354 440 4005 or via +47-47 800 100
Risto Perttunen, CEO of FIM, phone: +358-9 613 4600
Frank O. Reite, Executive Vice President, Glitnir Markets, mobile + 47-915 80 604
Bjørn Richard Johansen, Managing Director, Corporate Communications, Glitnir,
mobile +47-47 800 100, e-mail: firstname.lastname@example.org
Press briefing in Finland
FIM and Glitnir will host a press briefing at Hotel Kämp (Pohjoisesplanadi 29), on Monday 5, 2007 at 11.30 a.m. local time. The press conference will be hosted by Bjarni Ármannsson, CEO, Glitnir banki hf. and Risto Perttunen, CEO, FIM Group Corporation. For more information contact Bjørn Richard Johansen on phone +47-47 800 100 or e-mail to: email@example.com or Sanna Päiväniemi, phone +358 9 6134 6493 or e-mail: Sanna.Paivaniemi@fim.com
Glitnir and FIM will host a telephone conference in English at 12.30 Finland, 10.30 UK/Iceland, 11.30 Oslo time. Monday 5 February. Bjarni Ármannsson, CEO of Glitnir, and Risto Perttunen, CEO, FIM will present the transaction and chair the phone conference.
To participate, call:
UK +44 (0)20 7162 0025
Norway: + +47 2156 3120
Denmark: +45 327146/7
Finland: +358 (0)9 2313 9201
Sweden +46 (0)8 5052 0110
The conference call, along with a webcast of the presentation, will also be broadcast live on the Internet and can be accessed on www.glitnirbank.com.
Nordics list - Turnover 2006 (OMX + Oslo proforma)
Rank % Broker
1 7.74 Skandinaviska Enskilda Banken AB
2 6.60 Carnegie Investment Bank
3 5.60 Glitnir/FIM
4 5.48 Morgan Stanley & Co. International Ltd.
5 4.86 Svenska Handelsbanken
Nordics list - #Trades 2006 (OMX + Oslo Proforma)
1 7.02 Nordnet Bank AB
2 6.12 Glitnir/FIM
3 5.70 Skandinaviska Enskilda Banken AB
4 5.64 Morgan Stanley & Co. International Ltd.
5 5.27 Nordea Bank
The financial group Glitnir offers universal banking and is a leading niche player in three global segments; seafood/food, sustainable energy, and offshore supply. Glitnir is a Nordic bank and consider Iceland and Norway as home markets. Services include retail, corporate and investment banking, stock trade and capital management. Glitnir is the sole owner of a bank in Luxembourg (Glitnir Bank Luxembourg S.A) and banks and financial services companies in Norway (BNbank and Glitnir bank, Glitnir Securities and Glitnir Kapitalforvaltning, the factoring company Glitnir Factoring, and 50.1 percent of Union Gruppen. Glitnir's subsidiary BNbank own 45 per cent of Norsk Privatøkonomi ASA). In Sweden, Glitnir owns the leading Swedish brokerage firm Glitnir AB (former Fischer Partners). Glitnir operates branches in London and Copenhagen and representative offices in Halifax, Canada and in Shanghai, China. Glitnir plan to open an office in New York, USA, to support the North American business in the spring of 2007. Glitnir own 54 percent of MasterCard in Iceland. Glitnir is listed on the Icelandic Stock Exchange. Glitnir has shown remarkable growth in recent years. The 2006 results, published 30 January, show record after-tax profits of EUR 435 million, an increase of 102% over 2005. Glitnir reported a record high after-tax return on equity of 39.4 percent in 2006. For more information: www.glitnirbank.com
This stock exchange release must not be released or distributed in whole or in part in or into the United States, Canada, Japan or Australia. This stock exchange release is neither an offer to purchase nor a solicitation for an offer to sell shares, and the tender offer will not be made directly or indirectly in the United States, Canada, Japan or Australia or any other jurisdiction where such an offer would violate laws of that jurisdiction. This stock exchange release and tender offer will not and may not be distributed, forwarded or transmitted in any way, such as by post, fax, email or telephone, or in any other way to or from areas where it would violate the law.
FIM Group Corporation
Risto Perttunen, CEO
For additional information, please contact:
Risto Perttunen, CEO, tel. +358 9 6134 6303
Helsinki Stock Exchange
The main media
Established in 1987, FIM is a Finnish investment services group that offers asset management, brokerage and investment banking services for private persons and organizations. In addition to the head office in Helsinki, FIM has regional offices in Espoo, Jyväskylä, Kuopio, Lahti, Oulu, Riihimäki, Tampere, Turku, and Vaasa. FIM also operates in Stockholm and Moscow. The company's net sales in 2006 were about 82 million euros and operating profit 19.1 million euros. FIM employed 284 persons at the end of 2006. www.fim.com