STOCKHOLM, Sweden, Oct. 20, 2003 (PRIMEZONE) -- After the publication of Fastighets AB Tornet's interim report for January-June 2003, Lehman Brothers Real Estate Partners L.P. (LBREP) and Ratos AB initiated a due diligence-process with a view to presenting a public offer for all shares in Tornet. The presentation of a public offer was conditional on the outcome of the due diligence-process and on ensuring financing. The Board of Directors made the assessment that the intended offer could be of interest to the shareholders and a due diligence-process was therefore approved. No information suited to affect, to a not insignificant extent, the previous valuation of Tornet's shares has been communicated to LBREP or Ratos.
After completion of the process, LBREP and Ratos have decided to make a public offer through their jointly owned company LRT Acquisition AB. Tornet has used Deutsche Bank AG London as advisor to evaluate the terms of the offer. Tornet's Board of Directors is unanimously recommending the shareholders to accept LBREP's and Ratos offer. The written motivation of the Board of Directors is enclosed with this press release.
Danderyd, 20 October 2003
Fastighets AB Tornet (publ)
Statement by the Board of Directors of Fastighets AB Tornet in view of the public cash offer from Lehman Brothers Real Estate Partners L.P. and Ratos AB
Lehman Brothers Real Estate Partners L.P. ("LBREP") and Ratos AB ("Ratos") have today announced a public cash offer ("The Offer") to the shareholders of Fastighets AB Tornet ("Tornet") through the jointly owned company LRT Acquisition AB ("LRT Acquisition"). The Board of Directors of Tornet has evaluated the Offer and is issuing the following statement:
LBREP and Ratos are offering shareholders in Tornet SEK 190 in cash per share, which values the company at SEK 4 914 million. This offer corresponds to an offer premium of 8 per cent compared with the share's average last paid price for the past 30 trading days of SEK 176.40 and an offer premium of 6 per cent compared with the share's last paid price of SEK 178.50 on 16 October, the last trading day prior to the publication of the Offer.
LBREP and Ratos have for a long period been working on the possibilities for jointly acquiring the shares in Tornet. The Board of Directors of Tornet has rejected indicative preliminary offers from LBREP and Ratos on two occasions this year, among other reasons because the offers were not found to correspond to fully satisfactory value for Tornet's shareholders.
When Tornet was listed on the stock exchange on 7 May 1996, the closing price was SEK 56.50. The share price has developed strongly this year, which has led to a successive reduction in the discount on the share. The level of the offer, SEK 190 per share means that the discount in relation to the share's breakup value* as at 31 December 2002, SEK 218 per share, was further reduced. The share's breakup value has in the view of the Board, decreased since 1 January this year. Taking this into consideration, the offer must be considered as being fair.
The Board of Directors makes the assessment that there is a considerable support for the Offer both among institutional and smaller shareholders. This is based, among other things, on institutional shareholders, who hold shares corresponding to 55 per cent of all shares in Tornet, having undertaken, before publication of the Offer, to accept it. In the light of this, the Board of Directors finds that it would be difficult to acquire the capital through these shareholders that may be required for Tornet's continued growth.
Deutsche Bank AG London ("Deutsche Bank") has been appointed by the Board to evaluate the conditions of the Offer to the shareholders. In its advice, Deutsche Bank has taken into consideration the board's commercial assessments, among a number of other factors. On the basis of Deutsche Bank's Fairness Opinion, the Board of Directors considers that the price level in the Offer is fair.
In the light of this, the Board of Directors of Tornet unanimously recommends the shareholders to accept the Offer.
Danderyd, 20 October 2003
Fastighets AB Tornet (publ)
The Board of Directors
Fastighets AB Tornet is one of Sweden's major listed property companies. Its property holding has a lettable area of around 2.8 million square metres and a book value of over SEK 19 billion. Almost 97 per cent of the property holdings, measured as book value, are in Sweden and mainly concentrated in Sweden's six largest cities and in Norrkoping and Karlstad. The properties are owned and managed by the subsidiaries ArosTornet, Malmstaden, MalarTornet, SkansTornet and Euro Tower.
* Breakup value: The estimated liquidation value of Tornet in the event of a sale at market price of all of its assets with a deduction for transaction costs, structural costs and tax. In this way, the capital costs for Tornet's loan liabilities have been adjusted to a market level.
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http://www.waymaker.net/bitonline/2003/10/20/20031020BIT00040/wkr0001.doc
http://www.waymaker.net/bitonline/2003/10/20/20031020BIT00040/wkr0002.pdf