Investor Update

Dec 18, 2020

Press Release

Good everyone. We have a short presentation from Castellum because we have now changed our bid on Entra and done another activity as well. It's just been done approximately published ten minutes ago, so I will go a little bit slow in the beginning, so everyone can have the time to come in. But we can take the next slide, please. What we are now announcing is two things. We are, first of all, reversing our offer on Entra. That offer now includes that we have we issue eight new Castellum shares for every 13 Entra shares, 13 Entra shares, plus a cash component of NOK 54.4. This means that we have a stock of 7129% cash consideration. It also includes, of course, mix and match facility in there. This first offers equals to per Entrasher then SEK185K, Castellum, and then the synergies that we will come back to of SEK16. And plus that, we also have an impact on the next item where we're doing right now. We also signed a contract with Blackstone to sell a large logistic and warehouse and light industry portfolio in Sweden in the existing Castellan portfolio for SEK19 billion. That is 20% premium to the last reported value. This sales comes in two portions. First of all, a portion of SEK 5,000,000,000, meaning that 39 assets that we directly sell. And then SEK 13,000,000,000, which is in will be completed if we succeed in the completion of entering and as owner to Entra. This value uplift is the same as SEK 8 per Castellum shares at this moment. But even if we sell a lot of the warehouse and logistics and light industry, we still have a good platform for the future in the logistics. We have as I will show you later, we have all the developments left in the existing Castellan portfolio. So we are very pleased because we're announcing now that we're doing the sales of all these assets and then also has the offer increased to the shareholders of Entrance. We can take the next slide, please. So what does this mean then? First of all, I mean, it's almost a 30% increase on premium of interest undisturbed share price. And it's also that we can build something that's much, much stronger together. So we are stating the same thing that we stated a month ago. We really would like to merge these two companies into something that has not been created before in The Nordics, some office portfolio that is strong, fantastic and with the best opportunities going forward. This portfolio will now include assets for billion. And doing this, we will also be able of crystallizing synergies for approximately SEK300 million. And we will, on top of that, be able of looking through the target the rating of the new target and getting a lower rate higher rating that Castellum has today that gives us this part of the synergies. So simply an opportunity that we can't miss. This large commercial real estate company in the Nordic region will definitely would be number one in size. But it will also hold 40% of its income from the public sector. And when we talk public sector here, don't do any mistakes, this is government income. We're talking about more or less 100%. On top of that, we then have the development portfolio of approximately 1,000,000 square meters. So this is what we like to do. We would like to merge the two blue chip culture and the top companies in The Nordics. We would like to continue being sustainable and us actually being the sustainable champion and being part of all that we have already started on each side today. So if we continue and take the next slide, please, you can see what we're doing with, of course, the premium, what I will do with the 20%. The yield on the sales is approximately 4.7%. And as I said, it's mixed into two portions. The first tranche is existing of 39 properties, valued for sold for approximately SEK5 billion and the second tranche will be conditional on the completion on the offer on Entra. So totally, this adds up to two fourteen assets. And we can take the next slide, please. But we're also then keeping, as I said, the logistic and warehouse part of the portfolio. The future will give us the opportunity to create another 1,000,000 square meters and we'll keep still this three sixty two assets that we already square meters that we already own in the nearby of Gothenburg and Stockholm. So this will give us future to continue to grow on NAV and also serve the logistics sector with what is needed in for the future. So to summarize, if you take the next slide, please. We have the same objective that we had one month ago when we entered the market with this news. We would like to merge one of the two best companies under the office side in The Nordics. We would like to create something that's not been created before. We would like to take care of their synergies and create value for the shareholders and simply brings the strongest listed balance sheet in The Nordics to continue forward on a sustainable and new tech era. So that is our objective and we hope this will be pleased to the shareholders of both Castellum and Entra. Thank you very much. I'm leaving for questions.