European Event-Driven Analyst

Jesus Rodriguez Aguilar

Jesús is an Insight Provider (Event-driven) on the Smartkarma network, where he looks across sectors at opportunities arising from securities mispricing (both credit and equity), share classes, bid announcements, prospective bids, and special situations. He has served as Economic and Business Advisor at the Spanish Congress in Madrid. Prior to that, he has worked in the City of London: as a Credit Analyst at Bloomberg; Event-driven associate at former boutique European Research; and doubled as Special Situations and Equity-linked VP (convertible bonds) at Merrill Lynch. Jesús has an MBA from the London Business School, a BA (Hons.) degree in Economics from the Complutense University in Madrid, and a BA (Hons.) in Law from U.N.E.D., also in Madrid.

Norwegian Finans Holding - Nordax Bank: Let the Negotiations Begin

Norwegian Finans Holding (NOFI) – Quality Growth Business @ Affordable Valuations !!

Nordax Bank Sweetens Its Bid for Norwegian Finans

Event-Driven

Norwegian Finans Holding ASA / Event-Driven

On 14 July, <a href="https://www.smartkarma.com/entities/nordax-group-ab" target="_blank" data-smartkarma-citation="entities:22439:1" rel="noopener">Nordax Group AB (NDX SS)</a>, through Nordax Bank, further raised its offer to acquire <a href="https://www.smartkarma.com/entities/norwegian-finans-holding-asa" target="_blank" data-smartkarma-citation="entities:26098:1" rel="noopener">Norwegian Finans Holding (NOFI NO)</a> to NOK 105/share, cum dividend, from NOK 100/share, for a total consideration of c. NOK 19.6 bn.
<ul>
<li>Nordax had already launched an <a href="https://platform.marketintelligence.spglobal.com/web/client?auth=inherit#news/article?KeyProductLinkType=2&amp;id=64047500" target="_blank" rel="noopener">improved offer</a> in May to acquire the entire outstanding share capital of NOFI, which is <a href="https://platform.marketintelligence.spglobal.com/web/client?auth=inherit#news/article?KeyProductLinkType=2&amp;id=64850383" target="_blank" rel="noopener">merging</a> with unit <a href="https://platform.marketintelligence.spglobal.com/web/client?auth=inherit#company/profile?KeyProductLinkType=2&amp;id=4536697" target="_blank" rel="noopener">Bank Norwegian ASA</a>, after its initial March offer of NOK 95/share plus dividend was rejected.</li>
<li>As mentioned in my previous insight <a href="https://www.smartkarma.com/insights/norwegian-finans-holding-nordax-bank-let-the-negotiations-begin" target="_blank" data-smartkarma-citation="insights:48944" rel="noopener">Norwegian Finans Holding - Nordax Bank: Let the Negotiations Begin</a>, the 4 March announcement has led to an <a href="https://mb.cision.com/Main/7708/3339233/1411921.pdf" target="_blank" rel="noopener">improved offer</a>, NOFI rejected Nordax's initial bid. NOFI said then it would grant Nordax access to a confirmatory due diligence process.</li>
<li>My previous (4 May) recommendation (<a href="https://www.smartkarma.com/insights/nordax-bank-sweetens-its-bid-for-norwegian-finans" target="_blank" data-smartkarma-citation="insights:51060" rel="noopener">Nordax Bank Sweetens Its Bid for Norwegian Finans</a>) was Long NOFI, TP 103.03 (with possible upside up to c. NOK 109.2, a 15% increase to the initial offer).</li>
<li>The best and final offer is 1.9% above my last TP and comes between the previous offer and the possible upside I pointed out.</li>
</ul>
The final offer, which follows the completion of due diligence, represents a 37.2% premium to NOFI's 3 March closing share price on Oslo Børs.
The offer is subject to acceptance by at least 90% of NOFI's shareholders, with Nordax Bank potentially lowering the acceptance threshold to two-thirds. Nordax Bank noted that, while it aims to acquire Bank Norwegian in full, it also "sees substantial merit in becoming a majority shareholder." Bank Norwegian is to become the ultimate parent following its merger with NOFI, expected to take place on 20 July.
Norwegian Finans investors Nordic Capital Fund VIII, Nordic Capital Fund IX and Finland-based Sampo Oyj are supporting the offer. Nordic Capital Fund IX and Sampo, which own 16.40% and 6.33% in Norwegian Finans, respectively, have conditionally agreed to exchange their shares in the company for shares in Nordax, subject to successful completion of the offer.
Offer document expected to be approved during the week of 2 August, with the acceptance period commencing thereafter (expected to last 20 business days). Completion of the offer in H2 2021, following receipt of regulatory approvals.
Gross spread is 1.9% (should be c. 6% annualised), reiterate long NOFI, TP 105/share.

On 14 July, Nordax Group AB (NDX SS), through Nordax Bank, further raised its offer to acquire Norwegian Finans Holding (NOFI NO) to NOK 105/share, cum dividend, from NOK 100/share, for a total consideration of c. NOK 19.6 bn.

Nordax had already launched an improved offer in May to acquire the entire outstanding share capital of NOFI, which is merging with unit Bank Norwegian ASA, after its initial March offer of NOK 95/share plus dividend was rejected.
As mentioned in my previous insight Norwegian Finans Holding - Nordax Bank: Let the Negotiations Begin, the 4 March announcement has led to an improved offer, NOFI rejected Nordax's initial bid. NOFI said then it would grant Nordax access to a confirmatory due diligence process.
My previous (4 May) recommendation (Nordax Bank Sweetens Its Bid for Norwegian Finans) was Long NOFI, TP 103.03 (with possible upside up to c. NOK 109.2, a 15% increase to the initial offer).
The best and final offer is 1.9% above my last TP and comes between the previous offer and the possible upside I pointed out.

The final offer, which follows the completion of due diligence, represents a 37.2% premium to NOFI's 3 March closing share price on Oslo Børs.
The offer is subject to acceptance by at least 90% of NOFI's shareholders, with Nordax Bank potentially lowering the acceptance threshold to two-thirds. Nordax Bank noted that, while it aims to acquire Bank Norwegian in full, it also "sees substantial merit in becoming a majority shareholder." Bank Norwegian is to become the ultimate parent following its merger with NOFI, expected to take place on 20 July.
Norwegian Finans investors Nordic Capital Fund VIII, Nordic Capital Fund IX and Finland-based Sampo Oyj are supporting the offer. Nordic Capital Fund IX and Sampo, which own 16.40% and 6.33% in Norwegian Finans, respectively, have conditionally agreed to exchange their shares in the company for shares in Nordax, subject to successful completion of the offer.
Offer document expected to be approved during the week of 2 August, with the acceptance period commencing thereafter (expected to last 20 business days). Completion of the offer in H2 2021, following receipt of regulatory approvals.
Gross spread is 1.9% (should be c. 6% annualised), reiterate long NOFI, TP 105/share.

Norwegian Finans Holding ASA

Nordax/NOFI: Best and Final Offer