At the end of 2020, Castellum withdrew from a public takeover bid to the shareholders in the Norwegian listed property company Entra as a stage in building further on its Nordic platform for offices and logistics.
The offer entailed both 8 newly issued shares in Castellum for every 13 shares in Entra, as well as NOK 54.39 in cash per share in Entra, which valued each individual share in Entra at NOK 185 at the announcement of the offer, and participation in further increases in value in the combined company through both synergies and income from property management, transactions and project development.
The combination with Entra would provide an excellent platform to create continued shareholder value and is logical, from an industrial standpoint: a major Nordic property company with a portfolio value of approximately SEK 145 billion would have been created, with a focus on offices, warehouses and logistics. Active property management in combination with a shift in the portfolio through both project development and transactions was expected to enable increased income from property management and net asset value. In February 2021, however, Castellum withdrew the offer as a result of the offer not gaining sufficient acceptance.
Sale of asset portfolio to Blackstone
In conjunction with the public takeover bid to the shareholders in Entra, Castellum also publicised the sale of a mature, stabilised asset portfolio, consisting primarily of assets in warehouse/logistics of various ages, to Blackstone for net proceeds of approximately SEK 18.1 billion, less expenses and deferred tax of approximately MSEK 900. The sale was divided into two tranches:
- Portfolio No. 1, with a net sale price of approximately SEK 5.0 billion and a valuation at year-end of approximately SEK 4.8 billion, with hand-over in early February. In conjunction with the sale, deferred tax income of MSEK 600 will be recognised. The transaction was contingent upon approval by the Swedish Competition Authority, which was received in January 2021, and will thus be recognised as sold in the first quarter of 2021.
- Portfolio No. 2, with a net sale price of approximately SEK 13.1 billion and a valuation at year-end of approximately SEK 12.7 billion, with hand-over in late March or early April. Deferred tax income of approximately SEK 1.8 billion would have been recognised in conjunction with the sale. The transaction was contingent upon both approval by the Swedish Competition Authority (received in January 2021) and the successful acquisition of Entra (offer withdrawn in February 2021).
With the sale of the first portfolio, Castellum received approximately SEK 5 billion in proceeds, thereby fortifying an already healthy balance sheet, which will provide the company with the opportunity to put its pace of investment into a higher gear, reduce its financial risk and/or distribute capital to its owners. Since the Entra deal was not completed, the second part of the transaction was not carried out. Instead, Castellum signed a new agreement in February 2021 on the sale of an asset portfolio with 53 properties to Blackstone for SEK 4.8 billion, net, less overheads and deferred tax of SEK 0.2 billion. The agreed property value involves a premium of 27% against the latest Q3 2020 valuation and 15% against the Q4 2020 valuation. Hand-over will take place in May 2021.