SpareBank 1 SR-Bank ASA proposes an offer and an invitation to discussions on a merger with Sandnes Sparebank


The Board of Directors of Sandnes Sparebank have summoned the Board of Trustees to a meeting on 26 November, where the bank's future belonging will be discussed, among other things. The Board of Directors of Sandnes Sparebank has concluded that it will not be possible to remain independent in the time ahead. On this basis SpareBank 1 SR-Bank proposes an offer and an invitation to discussions on merging the two banks

On 13 November 2014 Sandnes Sparebank announced that it had entered into an agreement with Eika Alliansen to accede as a party to that alliance. The agreement has been signed subject to approval by Sandnes Sparebank's Board of Trustees on 26 November 2014.

It is evident from the notice to the Board of Trustee's meeting that the bank needs partners in order to remain an attractive bank with a strong identity, good and modern solutions and thereby strong competitive ability.

In this regard, Sandnes Sparebank has considered three possible strategic directions:

1 Remain independent as today,

2 Cooperation with B5 on the procurement of services from Evry, and

3 Become a part of Eika Alliansen with services from SDC.

A strong and future-oriented finance group for the benefit of the region

As the largest equity certificate holder in Sandnes Sparebank, SpareBank 1 SR-Bank supports the goal of strong local orientation, which includes being an active proponent for growth and development in North Jæren. To achieve this, SpareBank 1 SR-Bank is of the opinion that a merger of Sandnes Sparebank and SpareBank 1 SR-Bank is a fourth strategic option that should be considered as better than the proposal presented to the Board of Trustees.

A merger of the banks will have several positive effects beyond those described in the proposal to accede to Eika Alliansen. SpareBank 1 SR-Bank believes a merger will be a better solution for the customers, employees, owners and the whole of North Jæren. A merger of the two banks will strengthen a regionally-based finance community, based on sound and better expertise, better opportunities to undertake substantial investments in new IT technology, and not least ensure adequate access to capital for businesses and private customers.

A merger of the banks will result in the continued development of jobs in Sandnes, which means that Sandnes Sparebank's plans of moving to new premises in the inner harbour in Sandnes are maintained. Following a merger it would be natural to move units, which currently are not in Sandnes, to the new, planned premises. This will most likely result in more jobs in Sandnes than at present. There will be no redundancies as a direct result of an eventual merger.

Settlement and pricing of Sandnes Sparebank
As a part of an eventual merger, as consideration for the primary capital, shares will be issued in SpareBank 1 SR-Bank for a new savings bank foundation. This will be established by Sandnes Sparebank. The savings bank foundation will aim to contribute to the development of the local community, particularly in Sandnes, through financial contributions to charitable purposes. In addition, the foundation will be a long-term, stable owner of shares in SpareBank 1 SR-Bank. The new foundation may, together with Sparebankstiftelsen SR-Bank and SpareBank 1-Stiftinga Kvinnherad, achieve an overall ownership of more than 30 per cent in the merged bank.

A merger may be carried out whereby the equity certificate owners in Sandnes Sparebank receive shares in SpareBank 1 SR-Bank. The Board of Directors of SpareBank 1 SR-Bank sees potential for completing a merger based on a pricing of the total equity in Sandnes Sparebank representing a premium in the interval 30% to 50% per equity certificate. The basis for this premium calculation is the volume weighted average trading price for Sandnes Sparebank's equity certificates in the last 30 days.

Invitation to detailed discussions

The Board of SpareBank 1 SR-Bank urges the Board of Sandnes Sparebank to consider the proposed public offer, and to postpone consideration of the proposed alliance with Eika.

SpareBank 1 SR-Bank further proposes that the banks spend time ahead to conduct a process with an aim to negotiate a final merger agreement. Further conditions in connection with a merger must be discussed between the parties and may deviate from the aforementioned.

Among other things, a merger assumes the following;

  1. A negotiated final agreement between the boards to merge.
  2. The agreement is granted final approval by the Board of Trustees in Sandnes Sparebank and by the Supervisory Board and General Meeting respectively of SpareBank 1 SR-Bank.
  3. The agreement is granted the necessary approvals from the Ministry of Finance, the Financial Supervisory Authority and the Competition Authority on terms that do not materially change the assumptions that underlie a merger agreement.

There is no guarantee that negotiations will be initiated or that a merger is possible to implement.

This offer is valid until Thursday 27 November at 8 a.m. The offer is withdrawn if the Board of Trustees of Sandnes Sparebank approves the Board's proposal to accede to Eika Alliansen on 26 November 2014.

Stavanger, 24 November 2014

Contact persons:

CEO Arne Austreid, tel. 900 77334
CFO, Inge Reinertsen, tel. 909 95033
EVP Communications, Thor-Christian Haugland, tel. 480 31633

The information in this report is mandatory under the Securities Trading Act Section 5-12.

About Us

SpareBank 1 SR-Bank is the second largest Norwegian financial group and operates in most parts of South Norway which includes Rogaland, Agder, Vestland and Oslo. We provide financial products and services to over 300 thousand customers, including loans and deposits, mutual funds and asset management, insurance and pension savings, payment and financing services, real estate brokerage, accounting services and services related to the money and capital market. The head office is in the city of Stavanger.