Ellevio announces a cash offer of SEK 90 per share to the shareholders of Dala Energi

The Offer is not being made, and this press release may not be distributed, directly or indirectly, in or into, nor will any tender of shares be accepted from or on behalf of shareholders in Australia, Hong Kong, Japan, Canada, New Zealand, the United States or South Africa, or any other jurisdiction in which the making of the Offer, the distribution of this press release or the acceptance of any tender of shares in the Offer would contravene applicable laws or regulations or require further offer documents, filings or other measures in addition to those required under Swedish law.

The Ellevio group, through Ellevio Holding 1 AB[1] (“Ellevio”) together with its subsidiaries (the “Ellevio Group”), hereby announces a public offer to the shareholders of Dala Energi AB (publ)[2] (“Dala Energi” or the “Company”) to tender all shares in Dala Energi to Ellevio at a price of SEK 90 per share (the “Offer”), which represents a premium of 86.5 per cent to the volume-weighted average trading price of SEK 48.3 for the shares over the last 90 trading days. The shares in Dala Energi are listed on Nasdaq First North Growth Market.

Summary of the Offer

• Ellevio offers SEK 90 in cash per share (the “Offer Price”) in Dala Energi. The total value of the Offer, based on all 24,771,656 shares in Dala Energi amounts to approximately SEK 2,229 million.

• The price offered for the shares represents a premium of 75.8 per cent to the closing price for the  shares on 28 March 2024 (the last day of trading prior to the announcement of the Offer), a premium of 84.3 per cent to the volume-weighted average trading price for the  shares over the last 30 trading days ended on 28 March 2024 (the last day of trading prior to the announcement of the Offer) and a premium of 86.5 per cent to the volume-weighted average trading price for the shares over the last 90 trading days ended on 28 March 2024 (the last day of trading prior to the announcement of the Offer).

• Dala Energi’s largest private shareholder Antap Capital AB, who holds 883,087 shares in Dala Energi, corresponding to approximately 3.56 per cent of the shares and votes, has declared their support for and are in favour of the Offer.
• The acceptance period in the Offer is expected to commence on 5 April 2024 and end on 28 June 2024.

Johan Lindehag, Group CEO of Ellevio AB (publ), comments:

“At Ellevio, we have a longstanding history as owner, manager and operator of electricity networks in Sweden and we are very pleased to present an attractive offer to all shareholders in Dala Energi. We already have strong roots in Dalarna, and with Ellevio as owner, Dala Energi's operations will continue to develop for the benefit of customers, employees, the local community and the region at large.”

Background and reasons for the Offer

Ellevio and Dala Energi are an attractive combination

Ellevio is Sweden's largest independent electricity distributor, with a well-established strategy to grow through both organic investments and acquisitions. Ellevio currently has 36,000 customers in Dalarna, a strong local presence and partnerships with entrepreneurs in the area. Dala Energi, which is a well-managed and responsible company, is an attractive complement to Ellevio's operations. Overall, Ellevio's offer to the shareholders of Dala Energi represents a unique opportunity for all shareholders to realise value at an attractive premium and free up capital for other investments. Ellevio is also convinced that the deal will create favourable conditions for the continued operations, its employees and customers.

Significant investments are needed to secure the electricity networks of the future

The energy industry is currently undergoing the biggest change in modern times. The transition to electrification of transportation and industrial companies, an increasing share of renewable power generation, and capacity and electricity shortages in Europe are placing new demands on electricity networks. Extensive modernisation and weatherproofing of local networks to increase resilience to wind and weather and reduce the number of power outages is ongoing. Since 2016, Ellevio has invested over
SEK 20 billion in existing electricity networks. Going forward, Ellevio's clear ambition is to triple investments in electricity networks and energy infrastructure to enable the energy transition. In Sweden, and in Dalarna, Ellevio will double the annual investments in the electricity network, with annual investments of SEK 550 million in 2027. Upon an acquisition of Dala Energi, this network will also be included in Ellevio's expansive investment agenda, which will benefit the region and enable the establishment of new energy-intensive industries and jobs.

Advantageous tariff strategy with Ellevio

A comparison between Dala Energi's and Ellevio's tariffs shows that Ellevio has lower tariffs for most household fuses. Ellevio also applies a strategy of joint pricing, which means that the same tariff is applied for each customer group regardless of where in the country they live. This has generally been particularly favourable for customers in rural areas, where tariffs have historically been higher than in big cities.

Responsible partner for the fibre business

In order to ensure continued success and responsible ownership, Ellevio intends to enter into an agreement with Telia Company AB ("Telia"), if the Offer is completed, with the intention that the electricity network business is integrated into Ellevio and the fibre business is taken over by Telia. Telia is thus not a party to the Offer as such but intends to enter into a separate agreement with Ellevio regarding the transfer of the fibre business. Ellevio's assessment is that Telia's reach and presence in the region will provide the right conditions and scale to ensure the success of Dala Energi's fibre business. The planning of the final structure of the divestment, as well as any decision on specific measures regarding the integration, will be made in close cooperation between the parties based on a careful assessment of the complete information that will be available only after the completion of the Offer. Other businesses within Dala Energi, mainly interests in jointly owned companies, are intended to be divested to specialised operators in their respective fields, in a responsible manner. All such divestments will also be conditional on obtaining all necessary permits, approvals, decisions and other measures from authorities or similar, where necessary.

Local presence

Ellevio is convinced that knowledge, extensive industry experience and corporate culture are of utmost importance for Dala Energi's continued success, where the employees are the main factor in ensuring a stable and sustainable business. Both Ellevio and the fibre partner Telia are committed to establishing a local presence, both by having a close relationship with customers, but also by ensuring access to knowledgeable and experienced staff, which will be crucial for the continued electrification and digitalisation of Sweden. Together with Telia, Ellevio intends to ensure continued, safe and professional management of Dala Energi's strategically important electricity network and fibre assets. Upon an acquisition of Dala Energi, Ellevio intends to maintain a regional office and continue to grow in the region over time through regional expansion of organic investments and potential future acquisitions. For the remaining operations that are not part of electricity network or fibre business, Ellevio is committed to finding the best possible solution that enables both profitable growth and the retention of jobs in the community.

Responsible and long-term owners behind the offer

Ellevio is owned by some of Sweden's most respectable pension funds and by OMERS which is a Canadian pension fund. In Sweden, AMF, Third Swedish National Pension Fund and Folksam together manage the pension savings of more than half of Sweden's households and, through their ownership of Ellevio, aim to create long-term returns for Sweden's current and future senior citizens.

Management and employees

In connection with the acquisition, the electricity network business, which constitutes the largest part of Dala Energi, is intended to be integrated into Ellevio, while the fibre business is intended to be taken over by Telia. Ellevio's ambition is to provide a secured future for the electricity network operations within Dala Energi. Furthermore, Telia's ambition is to continue the expansion of the fibre network, as well as the modernisation and expansion of the mobile network, to reach more connected addresses and thus ensure that even more companies and residents in Leksand, Säter, Gagnef and Rättvik are connected to Sweden's leading digital infrastructure. Telia places great importance on establishing a local presence, both by having a close relationship with customers and by ensuring access to knowledgeable and experienced employees. With regard to the remaining partly owned operations within Dala Energi, Ellevio's ambition is to find the best possible solution that enables both profitable growth and the retention of jobs in the locality.

Apart from what has been stated above, no other decisions have been made regarding management and employees in Dala Energi. The completion of the Offer is therefore not expected to result in any material changes to Ellevio's or Dala Energi's employees and management (including their terms of employment) or to the existing organisation and operations, including employment and the locations where Ellevio and Dala Energi conduct their operations.

The Offer

Consideration

Ellevio offers SEK 90 in cash for each share in Dala Energi.

Should Dala Energi, prior to settlement of the Offer, distribute dividends or in any other way distribute or transfer value to its shareholders, the consideration in the Offer will be adjusted accordingly. In the event of either of the foregoing, Ellevio reserves the right to determine whether this price adjustment mechanism or condition 7 to completion of the Offer (see below) shall be invoked.

No commission will be charged in respect of settlement of the shares in Dala Energi tendered to Ellevio under the Offer.

Premiums

The price in the Offer represents a premium of[3]:

• 75.8 per cent compared to the closing price on Nasdaq First North Growth Market on 28 March 2024 (the last day of trading prior to the announcement of the Offer) of SEK 51.2 for the shares;
• 84.3 per cent compared to the volume-weighted average trading price of SEK 48.8 for the shares over the last 30 trading days ended on 28 March 2024 (the last day of trading prior to the announcement of the Offer); and
• 86.5 per cent compared to the volume-weighted average trading price of SEK 48.3 for the shares over the last 90 trading days ended on 28 March 2024 (the last day of trading prior to the announcement of the Offer).

Total value of the Offer

The Offer values Dala Energi, based on all 24,771,656 shares in Dala Energi, to approximately SEK 2,229 million.

Acceptance period

The acceptance period in the Offer is expected to commence on 5 April 2024 and end on 28 June 2024. Settlement is expected to be initiated on 5 July 2024.

Recommendation from the independent bid committee of Dala Energi

The board of directors of Dala Energi has appointed an independent bid committee which will evaluate the Offer and has announced that it intends to engage an independent external advisor to issue a so-called fairness opinion. Thereafter, the bid committee will publish its opinion and the reasons for this opinion regarding the Offer as soon as possible, however, no later than two weeks prior to the expiry of the acceptance period.

Ellevio’s shareholding in Dala Energi

Neither Ellevio nor any closely related companies or closely related parties own any shares or other financial instruments in Dala Energi that give financial exposure to Dala Energi shares at the time of this announcement, nor has Ellevio acquired or agreed to acquire any Dala Energi shares or any financial instruments that give financial exposure to Dala Energi shares during the six months preceding the announcement of the Offer.

Ellevio may acquire, or enter into agreements to acquire, shares in Dala Energi (or any securities that are convertible into, exchangeable for or exercisable for such shares) outside the Offer, but in any event, at a price per share not more than the Offer Price. Any purchases made or agreed will be in accordance with Swedish law and the Stock Market Self-Regulation Committee’s takeover rules for certain trading platforms (the “Takeover Rules”) and will be disclosed in accordance with applicable rules.

Declaration of intent from shareholders in Dala Energi

Dala Energi’s largest private shareholder Antap Capital AB, who holds 883,087 shares in Dala Energi, corresponding to approximately 3.56 per cent of the shares and votes, has declared their support for and are in favour of the Offer.

Conditions for completion of the Offer

Completion of the Offer is conditional upon:

1. the Offer being accepted to such extent that Ellevio becomes the owner of shares representing more than 90 per cent of the total number of outstanding shares in Dala Energi;
2. no other party announcing an offer to acquire shares in Dala Energi on terms that are more favorable to the shareholders of Dala Energi than the Offer;
3. with respect to the Offer and completion of the acquisition of Dala Energi, receipt of all necessary regulatory, governmental or similar clearances, approvals, decisions and other actions from authorities or similar, including from competition authorities and authorities for foreign direct investments (FDI), in each case on terms which, in Ellevio’s opinion, are acceptable;
4. neither the Offer nor the acquisition of Dala Energi being rendered wholly or partially impossible or significantly impeded as a result of legislation or other regulation, any decision of a court or public authority, or any similar circumstance;
5. no circumstances having occurred which could have a material adverse effect or could reasonably be expected to have a material adverse effect on Dala Energi’s financial position or operations, including Dala Energi’s sales, results, liquidity, equity ratio, equity or assets;
6. no information made public by Dala Energi, or otherwise made available to Ellevio by Dala Energi, being inaccurate, incomplete or misleading, and Dala Energi having made public all information which should have been made public; and
7. Dala Energi not taking any action that is likely to impair the prerequisites for making or completing the Offer.

Ellevio reserves the right to withdraw the Offer in the event that it is clear that any of the above conditions are not satisfied or cannot be satisfied. However, with regard to conditions 2–7 above, the Offer may only be withdrawn where the non-satisfaction of such condition is of material importance to Ellevio’s acquisition of Dala Energi or if otherwise approved by the Swedish Securities Council (Sw. Aktiemarknadsnämnden).

Ellevio reserves the right to waive, in whole or in part, one, several or all of the conditions set out above, including, with respect to condition 1 above, that Ellevio reserves the right to waive the condition and to complete the Offer at a lower level of acceptance.

Information about Ellevio

Ellevio is a Swedish limited liability company with corporate registration number 559005-2444, domiciled in Stockholm with the address Ellevio Holding 1 AB, Box 242 07, SE-104 51 Stockholm, Sweden. Ellevio is owned by OMERS Infrastructure (50 per cent), Third Swedish National Pension Fund (20 per cent), Folksam (17.5 per cent) and AMF (12.5 per cent). For more information about the Ellevio Group, see www.ellevio.se.

Information about Telia

Telia is a Swedish limited liability company listed on Nasdaq Stockholm with corporate registration number 556103-4249, domiciled in Stockholm with the address Telia Company AB, Stjärntorget 1, SE-169 79 Solna, Sweden. Telia is a Nordic and Baltic telecommunications leader and Nordic media house, serving consumers, businesses and public sector customers with essential digital infrastructure, ICT services and entertainment.

Information about Dala Energi

Dala Energi is a Swedish limited liability company listed on Nasdaq First North Growth Market with corporate registration number 556000-9374, domiciled in Leksand with the address Dala Energi, Övermovägen 15, SE-793 35, Leksand, Sweden. Dala Energi is the parent company in a group with the fully owned subsidiaries Dala Energi Kraftproduktion AB, Dala Energi Fibernät AB and Dala Energi Elnät AB. Dala Energi owns five associated companies: Dalakraft AB 24 per cent, Adven Siljan AB 24.5 per cent, Dala Vind AB 20.3 per cent, Kurbit AB 21.8 per cent and Prosumenten AB with 48 per cent. Dala Energi provides secure, competitive and sustainable energy and communication solutions. The operation includes facilities and technical infrastructure as well as trade and related services. This is primarily through its various subsidiaries in the group, but also through its ownership of associated companies.

Financing of the Offer

The Offer is not subject to any financing condition. Ellevio has received a binding undertaking regarding capital contributions from Ellevio AB (publ), a subsidiary within the Ellevio Group, corresponding to the total value of the Offer in the form of a loan through an intra-group loan agreement.

Review of information in connection with the Offer

Ellevio has, in connection with the preparations of the Offer, conducted a due diligence review of Dala Energi. Dala Energi has confirmed that Ellevio has not been provided with any inside information in connection with the due diligence review.

Approvals from authorities

Completion of the Offer is conditional upon, inter alia, all necessary clearances, approvals, decisions and other actions from authorities or similar, being obtained, in each case on terms which, in Ellevio’s opinion, are acceptable.

Preliminary timetable

Publication of the offer document (only in Swedish)                  4 April 2024

Acceptance period                                                             5 April 2024 – 28 June 2024

Commencement of settlement                                               5 July 2024

As set out above, the completion of the Offer is conditional upon, inter alia, the receipt of all regulatory, governmental or similar clearances, approvals and decisions that are necessary for the Offer and the acquisition of Dala Energi. Such clearances, approvals and decisions are expected to have been received by the end of the acceptance period for the Offer. If all relevant clearances, approvals and decisions are received in such time that the acceptance period can be closed before 28 June 2024, Ellevio may announce an earlier end date of the acceptance period, provided that such announcement can be made not less than two weeks prior to the new date of expiry of the acceptance period.

Ellevio reserves the right to extend the acceptance period, as well as to postpone the settlement date. A notice of any such extension or postponement will be announced by Ellevio by means of a press release in accordance with applicable rules and regulations.

Ellevio has been granted an exemption from the Swedish Securities Council (Ruling 2024:26) permitting that the initial acceptance period for the Offer is longer than ten weeks (up to twelve weeks, subject to any extensions) to enable for municipal decision-making processes of Dala Energi's three largest shareholders within this time period.

Redemption proceedings and delisting

As soon as possible after Ellevio has acquired shares representing more than 90 per cent of the total number of shares in Dala Energi, Ellevio intends to commence redemption proceedings under the Swedish Companies Act (Sw. aktiebolagslagen (2005:551)) to acquire all remaining shares in Dala Energi. In connection therewith, Ellevio intends to promote delisting of Dala Energi’s shares from Nasdaq First North Growth Market.

Applicable law and disputes

The Offer and the agreements entered into in relation to the Offer shall be governed by Swedish law. The Takeover Rules and the Swedish Securities Council’s rulings and statements on the interpretation and application of the Takeover Rules are applicable to the Offer. Disputes concerning, or arising in connection with the Offer, shall be settled exclusively by Swedish courts, with the Stockholm District Court as first instance.

Advisors

Ellevio has retained ICECAPITAL as financial advisor and Vinge as legal advisor in connection with the Offer.

Ellevio Holding 1 AB

The board of directors

Information about the Offer

Information about the Offer is available at:

www.framtidens-energi.se

The information was submitted for publication on 2 April 2024 at 07:30 a.m. (CEST).

For additional information, please contact:

Sarah Östberg, +46 (0)70-971 12 40

framtidens-energi@ellevio.se

Ellevio press centre +46 (0)20-20 20 60 (available 24/7)

Important information

This press release has been published in Swedish and English. In the event of any discrepancy in content between the two language versions, the Swedish version shall prevail.

This press release does not constitute an offer to purchase or sell shares, nor does it constitute an invitation to offer to buy or sell shares.

The Offer, pursuant to the terms and conditions presented in this press release, is not being made to persons whose participation in the Offer requires that additional offer documents be prepared or registration effected or that any other measures be taken in addition to those required under Swedish law.

The distribution of this press release and other documentation related to the Offer may in certain jurisdictions be restricted or affected by the laws of such jurisdictions. Accordingly, copies of this communication are not being, and must not be, mailed or otherwise forwarded, distributed or sent in, into or from any such jurisdiction. Therefore, persons who receive this communication (including, without limitation, nominees, trustees and custodians) and are subject to the laws of any such jurisdiction will need to inform themselves about, and observe, any applicable restrictions or requirements. Any failure to do so may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, Ellevio disclaims any responsibility or liability for the violations of any such restrictions by any person.

In accordance with Swedish law and customary practices, Ellevio or its closely related parties or its proxies (on behalf of Ellevio or, as applicable, its closely related parties) and closely related parties of its financial advisers may, at various times and by means other than the Offer, directly or indirectly, acquire or arrange for the acquisition of shares in Dala Energi comprised by the Offer or other securities exercisable, convertible or exchangeable for such shares, prior to or during the period of acceptance of the Offer. Such acquisitions may be made either on the open market or through private transactions. Information on such acquisitions or arrangements for acquisitions will be published in accordance with applicable Swedish law.

The Offer is not being made, and this press release may not be distributed, directly or indirectly, in or into, nor will any tender of shares be accepted from or on behalf of shareholders in Australia, Hong Kong, Japan, Canada, New Zealand, the United States or South Africa, or any jurisdiction in which the making of the Offer, the distribution of this press release or the acceptance of any tender of shares would contravene applicable laws or regulations or require further offer documents, filings or other measures in addition to those required under Swedish law.

The Offer, the information and documents contained in this press release are not being made and have not been approved by an authorized person for the purposes of section 21 of the UK Financial Services and Markets Act 2000 (the “FSMA”). Accordingly, the information and documents contained in this press release are not being distributed to, and must not be passed on to, the general public in the United Kingdom, unless an exemption applies. The communication of the information and documents contained in this press release is exempt from the restriction on financial promotions under section 21 of the FSMA on the basis that it is a communication by or on behalf of a body corporate which relates to a transaction to acquire day to day control of the affairs of a body corporate; or to acquire 50 per cent or more of the voting shares in a body corporate, within article 62 of the UK Financial Services and Markets Act 2000 (Financial Promotion) Order 2005.

Statements in this press release relating to future status or circumstances, including statements regarding future performance, growth and other trend projections and the other benefits of the Offer, are forward-looking statements. These statements may generally, but not always, be identified by the use of words such as “anticipates”, “intends”, “expects”, “believes”, or similar expressions. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There can be no assurance that actual results will not differ materially from those expressed or implied by these forward-looking statements due to many factors, many of which are outside the control of Ellevio and Dala Energi. Any such forward-looking statements speak only as of the date on which they are made and Ellevio has no obligation (and undertakes no such obligation) to update or revise any of them, whether as a result of new information, future events or otherwise, except for in accordance with applicable laws and regulations.