Handelsbanken bids for Bergensbanken
Handelsbanken has decided to make the following offer to the owners of Bergensbanken:
- Handelsbanken is offering 125 Norwegian kroner (NOK) in cash per share in Bergensbanken.
- The offer premium is 92,3 percent compared with the closing price on 30 April 1999
- The acquisition will not lead to any of the employees of Bergensbanken losing their jobs. All employees will be offered continued employment in the Handelsbanken Group.
Handelsbanken currently owns 8,2 % of the shares in Bergensbanken and has been given advance acceptance by the owners of a further 27,8 % of the shares.
Handelsbanken is offering the shareholders of Bergensbanken NOK 125 per share in cash. The value of the offer is NOK 1 550 million.
The offer is made on the following conditions, some or all of which may be waived:
- at the end of the offer period, Handelsbanken must own more than 90% of all the shares in Bergensbanken.
- all approvals from the public authorities necessary for the completion of the offer must be obtained . Interest compensation will be paid at 7% per annum from the date when the shares have been registred on a blocked account at the Norwegian securities depository until the date of settlement.
- if - before the acquisition has become legally binding - Bergensbanken makes dispositions outside the scope of normal business operations and which are of significant importance to Handelsbanken, the offer may be cancelled.
Time schedule
A prospectus concerning the offer will be available on 7 May 1999. The offer period runs until 4 p m on 28 May 1999. Handelsbanken reserves the right to extend the offer period.
Background to the acquisition of Bergensbanken
Handelsbanken considers the Norwegian market to be interesting, and now sees an opportunity to strengthen its position in Norway. The acquisition of Bergensbanken would increase Handelsbanken Norway's total assets by more than 50%. The Bank would have over 100,000 customers in Norway. This increases Handelsbanken's opportunities of contributing to a positive development of the Norwegian market, and will also have a long-term positive impact on the bank's profitability. Bergensbanken is well-suited for integration into the Handelsbanken Group. It has a strong local base and as part of Handelsbanken's decentralised operations this could be developed and enhanced. Bergensbanken will also play an important role in Handelsbanken's Nordic goal to have a strong position in all the most important towns in the Nordic countries. Handelsbanken's position in the area around Bergen, the second largest city in Norway, would be substantially enhanced with a total share of the market of almost 15%. Bergensbanken has 6 branches in Bergen. Handelsbanken already has one branch in the city.
Handelsbanken
Handelsbanken is a universal bank with the Nordic region as its domestic market. Handelsbanken offers the whole range of banking services: traditional corporate banking services, investment banking and trading as well as services for private customers, including life insurance.
The operation of the bank is strongly decentralised. The individual branch office - which normally has the best knowledge of its customers - has overall responsibility for Handelsbanken's business with the customer. Cost-effectiveness is given high priority. Handelsbanken's method of operating has led to the Bank during the ninties having a higher customer satisfaction rating than the average of other banks, according to Svenskt Kundindex - a survey performed since 1989 by, among others, the Stockholm School of Economics and Statistics Sweden.
With SEK 946 000 million in total assets at 31 March 1999, Handelsbanken is the largest commercial bank in the Nordic region. At the same date, Handelsbanken had 476 branches in Sweden, 16 in Norway, 15 in Finland and 3 in Denmark. Additionally, there are units in other parts of Europe, Asia and the USA. Handelsbanken has 8,500 employees, and employee turnover is very low.
Handelsbanken in Norway
Handelsbanken's operations in Norway began in 1988. Through the establishment of branch offices and acquisitions of Norwegian banks - Oslo Handelsbank, Stavanger Bank, and parts of Oslobanken - Handelsbanken now has 16 branches and approximately 300 employees in Norway. Total assets amount to NOK 22 000 million.
Integration
The integration between Bergensbanken and Handelsbanken in Norway is intended to be implemented along the following lines:
- Bergensbanken will be run as a separate company within the Handelsbanken Group with its own administration and management. The management will be unchanged. The bank will retain its name and geographical location.
- Foreign exchange and money market operations will still be conducted in Bergen.
- Handelsbanken Norway's shipping expertise will be located in Bergen.
- The acquisition will not lead any of the employees of Bergensbanken losing their jobs. All employees will be offered continued employment in the Handelsbanken Group. Handelsbanken has never in modern times laid off employees due to over-staffing or as a result of acquisitions. As employees of the Handelsbanken Group, the employees of Bergensbanken will have increased development opportunities.
- Handelsbanken's existing branch in Bergen will be integrated in the Bergen operations.
- Handelsbanken intends to continue contributing to and developing the active support which Bergensbanken gives to the local business community.
- Organisation, marketing and products will be co-ordinated taking into account the above.
Expected synergy effects are based on the following factors:
- Handelsbanken's international network and skills will benefit the operations of Bergensbanken's branches and customers.
- Handelsbanken's range of capital market products will be sold via Bergensbanken's branch network. Other products in Handelsbanken's large range of products will also be available to Bergensbanken.
- Through the financial strength of Handelsbanken, Bergensbanken's branches will be able to handle larger credit exposure than is possible at present.
- Handelsbanken's strong international rating will give Bergensbanken lower funding costs.
- Over a period of time, the integration will lead to cost reductions. These are expected to derive mainly from organisational integration and Handelsbanken's cost-effectiveness which will also benefit Bergensbanken.
1) With the normal reservation for higher bids.
2) In order to complete the acquisition on terms acceptable to Handelsbanken, the Bank must have been granted the necessary approvals from the Norwegian authorities before 14. December 1999. If these approvals have not been granted by 14 December 1999, Handelsbanken will not be bound to complete the purchase of shares in accordance with this bid. Handelsbanken may extend the period in order to receive approval of the acquisition. The seller will then be bound by his acceptance, although not beyond 31 January 2000.
This press release must not be distributed to or made public in the USA or Canada. The offer is not directed at persons whose participation is conditional on extra prospectuses, registration procedure or other measures than those which apply under Swedish law.
Further information is available from: <br>Arne Mårtensson, President and Group Chief Executive, tel: (+46) 8 22 92 20 <br>Bjørn-Åke Wilsenius, Head of Regional Bank Norway, tel: (+47) 22 94 08 70 <br>Lars Lindmark, Head of Corporate Communications Department, tel: (+46) 70 595 8580 <br>Gustaf Elmstedt, Head of Investor Relations, tel: (+46) 8 701 5142 <br> <br>A press conference will be held in Bergen at Radissson SAS Royal Hotel at 11 a.m. today, with Arne Mårtensson, President and Group Chief Executive, as one of the participants. <br>