Balder acquires residential properties for SEK 2,000 million and issues preference shares of up to SEK 1,152 million

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Summary

• Fastighets AB Balder (publ) (“Balder” or “the Company”) has entered into an agreement to acquire Bovista Invest AB (“Bovista”) at an assigned property value of approx. SEK 2,000 million
• Bovista is a residential real estate group that owns and manages 4,300 apartments, mainly in seven cities, of which properties in Gothenburg and Västerås accounting for approx 60% of the property value
• On 19 September 2013, based on authorisation from the Annual General Meeting, the Board of Directors of Balder resolved to invite institutional investors and the general public in Sweden to subscribe for preference shares (“the Offering” or “the Issue”)
• The subscription price is SEK 329 per preference share
• The effective annual yield is approx. 6.2% (1)
• The application period for subscription for preference shares is between 23 September and 4 October 2013 for the general public in Sweden and between 23 September and
  7 October 2013 for institutional investors
• If fully subscribed, Balder’s proceeds from the Issue will amount to approx. SEK 1,152 million, before issue costs

Acquisition of Bovista
Balder has entered into an agreement to acquire Bovista Invest AB at an assigned property value of approx. SEK 2,000 million. Bovista is a residential real estate group that owns and manages 4,300 apartments, mainly in seven cities. Together, its properties in Gothenburg and Västerås account for approx 60% of the property value and over 50% of the number of apartments in the transaction. The lettable space totals approx. 370,000 sq.m.. The transaction is conditional upon approval by the Swedish Competition Authority, and possession will take place as soon as possible after approval has been obtained.

Balder has previously announced that we wish to maintain as equal a distribution as possible between residential and commercial properties. Following the acquisition, Balder will attain a distribution corresponding to 53% commercial properties and 47% residential, compared with 57% commercial properties and 43% residential as at 30 June 2013.

Background and reasons
Balder is a real estate company whose business concept is, through local presence, to acquire, develop and manage residential and commercial properties in locations which are showing growth and positive development. As at 30 June 2013, Balder’s total real estate holdings comprised 431 properties with lettable space of approx. 1,572,000 sq.m. and a reported value of SEK 23,611 million. 34% of the reported value of the real estate holdings was located in the Stockholm region, while 31% was located in the Gothenburg/Western region.

The Company works continually to identify attractive real estate investments. Owning and managing properties is a capital-intensive business, and access to capital is vital in developing a successful real estate operation. Balder’s operations are financed with a combination of shareholders’ equity, interest-bearing debt and other liabilities.

To be able to finance new investments in property holdings without increasing Balder’s financial risk, the Board of Directors has resolved to implement the Offering. The intention is that the proceeds of the Issue will partly be used for the acquisition of Bovista.

The Offering
In view of the above, and supported by authorisation from the Annual General Meeting, the Board of Directors of Balder resolved on 19 September 2013 to increase the share capital by a maximum of SEK 3,500,000 by means of a new issue of up to 3,500,000 preference shares at a subscription price of SEK 329 kronor per preference share. If fully subscribed, Balder’s proceeds from the Issue will amount to approx. SEK 1,152 million, before issue costs. The right to subscribe for the preference shares shall, with deviation from the pre-emptive rights of shareholders, be directed to institutional investors and the general public in Sweden. The reason of the deviation from the pre-emptive rights is to achieve a good institutional ownership base and a broad distribution of preference shares among the general public.

The effective average annual yield is approx. 6.2%, calculated on the basis of a quarterly dividend of SEK 5 per preference share and a subscription price of SEK 329 per preference share.

The application period for subscription for preference shares is between 23 September and 4 October 2013 for the general public in Sweden and between 23 September and 7 October 2013 for institutional investors.

Upon full subscription of 3,500,000 preference shares, the number of shares in the Company will increase to 172,396,852, of which 10,000,000 will be preference shares, and the number of votes will increase by 350,000 to 27,346,174. This corresponds to a dilution of 2.0% of the capital and 1.3% of the votes.

In connection with the new issue, Balder will prepare a prospectus and seek approval and registration of the prospectus with the Swedish Financial Supervisory Authority. Balder intends to publish the prospectus via a separate press release.

Preliminary timetable for the Offering

Advisers
Handelsbanken Capital Markets is acting as financial adviser to Balder in connection with the transaction. Setterwalls Advokatbyrå is legal adviser.

For further information, please contact:
Erik Selin, CEO, +46 70 607 4790 or
Marcus Hansson, CFO, +46 76 836 9848

Balder discloses the information provided herein pursuant to the Swedish Securities Markets Act and/or the Swedish Financial Instruments Trading Act. The information was released for publication on 20 September 2013 at 07.30.

Important information
The information in this press release is not intended, directly or indirectly, to be distributed, published or made public in Australia, Hong Kong, Japan, Canada, Switzerland, Singapore, South Africa, the United States or any other jurisdiction where the distribution of this press release would be illegal. The distribution of this press release may be restricted by law in certain jurisdictions and persons who take part of this press release or other information set out herein should inform themselves of, and observe, any such restrictions.

The information in this press release does not constitute an offer to sell shares or solicitation of an offer to buy shares. This press release does not constitute a prospectus under the Prospectus Directive 2003/71/EG.

The information in this press release does not constitute and is not part of an offer or solicitation of an offer to buy or subscribe for securities in the United States. Securities mentioned herein have not and will not be registered in accordance with the Securities Act of 1933 (the “Securities Act”). Securities mentioned herein may not be offered or sold in the United States unless they are registered in accordance with the Securities Act or fall within an exemption in the Securities Act. There will not be any public offer in the United States regarding securities.

The information in this press release may not be forwarded or distributed to any other person and may not be reproduced in any way. The forwarding, distribution, reproduction or presentation of the information herein, partly or fully, may not be permitted. Failure to comply with these instructions may be a breach of the Securities Act or applicable laws in other jurisdictions.

(1) Average annual return on the preference share, calculated on the basis of the subscription price and a quarterly dividend of SEK 5 per preference share