Balder acquires an additional 22.9 per cent of SATO

– mandates Carnegie and SEB to evaluate the possibility to implement a directed issue in order to partially finance the acquisition

NOT FOR DISTRIBUTION OR RELEASED, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, JAPAN OR ANY OTHER JURISDICTION, IN WHICH THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL.

Summary of the acquisition and its overall effects

• Fastighets AB Balder (publ) ("Balder") has agreed to acquire an additional 22.9 per cent of the outstanding shares of SATO Oyj ("SATO") from Varma Mutual Pension Insurance Company (“Varma”) for a purchase price of EUR 235m (the "Acquisition")
• After the Acquisition, Balder will own 53.3 per cent of the outstanding shares and votes in SATO, whereby Balder will consolidate SATO in the group's accounts from year end, 2015
• Property value, pro forma as of September 30, 2015, amounts to approximately SEK 67bn – an increase of approximately SEK 27bn compared to September 30, 2015
• Loan-to-value ratio, regarding interest-bearing liabilities related to investment properties, pro forma as of September 30, 2015 decreases to approximately 49 per cent
• The share of residential properties pro forma as of September 30, 2015 including residential property projects are 65 per cent – an increase from 41 per cent as of September 30, 2015
• The rental value pro forma as of September 30, 2015 amounts to SEK 5,358m - an increase from SEK 2,795m as of September 30, 2015
• Profit from property management based on current earnings capacity pro forma as of September 30, 2015 attributable to the shareholders of the parent company increase to SEK 2,005m - an increase from SEK 1,805m as of September 30, 2015
• Balder intends to partially finance the Acquisition through a directed share issue of  7,500,000 Class B shares, which might be increased, and has mandated Carnegie and SEB to investigate the conditions therefor

Background to the acquisition

Over the past 10 years Balder has grown and become one of the largest listed property companies in Scandinavia with a property value of approximately SEK 40bn. As the company has grown, markets in neighboring countries has become increasingly interesting as these real estate markets among other are logical complement to the Swedish real estate market in general and to Balder in particular. The first property acquisition was made in Denmark in 2010 and in Finland 2014.

On April 1, 2015 Balder conducted its first acquisition of shares in SATO equivalent to 21 per cent of the outstanding shares and votes. Balder has thereafter gradually acquired additional shares in SATO and the total holding of shares and votes in SATO was 30.4 per cent prior to the Acquisition.

Since the initial acquisition Balder's knowledge and appreciation of SATO as well as its management and organization have deepened and strengthened. Balder finds SATO a very well managed residential property company with high-quality properties in good locations that complement Balder's existing operations and property portfolio. Balder has therefore agreed to acquire additional shares in SATO from Varma and Balder's ownership in SATO after the Acquisition amounts to 53.3 per cent of the outstanding shares and votes. The purchase price for the acquired 22.9 per cent amounts to EUR 235m (SEK 2,212m).

As a consequence, Balder will consolidate SATO from year end 2015. The pro forma value of the group's property portfolio amounts, as of September 30, 2015, to approximately SEK 67bn.

Briefly about SATO

SATO is one of the largest residential property companies in Finland. As of September 30, 2015 the carrying amount of the property portfolio amounted to EUR 2,836m (SEK 26,696m), annual rental value to EUR 265m (SEK 2,493m) and the lettable area to 1,364,773 square meters.
The property portfolio is primarily located in the Helsinki region but also in Tampere, Turku, Jyväskylä, Oulu and St. Petersburg.

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