Public Property Invest

M&A Activity • Jun 3, 2024

Public Property Invest - Information regarding bid for 100% of the shares in Terningen Invest

Public Property Invest - Information regarding bid for 100% of the shares in Terningen Invest

Oslo, 3 June 2024: Public Property Invest ASA ("PPI") has, on 21 May 2024,

submitted a bid to the board and shareholders of Terningen Invest AS

("Terningen") for the acquisition of up to 100% of the shares in Terningen.

Terningen owns, through subsidiaries, Terningen Arena Elverum, which consists

of 27,000 sqm of land and 20,700 sqm of buildings. The Ministry of Education

and Research is the largest and most important tenant, and the property

currently generates total annual rental income of approximately NOK 57.5

million. Many of Terningen's shareholders are also shareholders in PPI, and

PPI's objective with the bid is to strengthen its portfolio with an attractive

property, while allowing Terningen's shareholders to continue as shareholders

in PPI. PPI has secured sufficient external debt financing, and therefore

Terningen's shareholders will also benefit from PPI's low loan-to-value ratio.

Further, Terningen's future refinancing needs will be relieved.

The bid had the following main conditions:

- Property value of NOK 819 million. PPI assumed customary balance

adjustments, and the preliminary estimated equity value amounted to NOK

130,000,000. The price per share would thus be approximately NOK 13,000 per

share. The last trading of the share (approximately 6% of the shares in

Terningen) took place last week at approximately NOK 10,000 per share.

- It was proposed that the purchase price be settled by issuing shares in PPI

at a price of NOK 16.5 per share.

- It was assumed that PPI would be granted access to due diligence and that

Terningen's lender would approve the transfer.

- The bid was rejected by the board of Terningen Friday, 31 May 2024. PPI

believes that this is a transaction opportunity that has several advantages

for Terningen's shareholders and that the shareholders of Terningen should get

the opportunity to consider the bid. If a transaction is completed on the

conditions set out above, Terningen's shareholders would gain access to:

- A market-based valuation,

- Security for future financing needs,

- Continued exposure to real estate in a low-leverage property company, with

mainly public tenants, dividend capacity, and a liquid share.

Based on the above, PPI will contact Terningen's shareholders to request that

one or more shareholders in Terningen (in accordance with Article 11 of its

Articles of Association) who together own 25% or more of the company's shares,

demand a sales process in accordance with the same provision. If Terningen's

shareholders make such a decision, PPI will stand by the bid on the conditions

mentioned above, provided that PPI has been granted access to an exclusive

transaction process by 15 June 2024. Depending on the final transaction

structure, a final offer may also be subject to the publication by PPI of an

offering prospectus.

Questions related to this announcement can be directed to:

For further queries, please contact:

Ilija Batljan, interim CEO, ilija@publicproperty.no

About PPI

Public Property Invest was established in 2021 by SBB and Arctic Securities

with a long-term strategy of owning, operating, and developing socially

beneficial property in Norway. Sustainable property management is an integral

part of Public Property Invest's business.

Its portfolio of properties is characterized by strong tenants within the

public sector, such as the police, judiciary functions and public health

organizations, on long lease contracts and a high occupancy rate.

Public Property Invest's portfolio consists of more than 368,000 sqm across 61

properties which had an aggregate estimated value of around NOK 9,976 million

as of 31 December 2023. It has more than 125 public tenants in 26 cities.

Hundreds of subcontractors ensure that its tenants can fulfil their important

societal missions every day.

In the medium to long term, Public Property Invest is expected to generate NOK

690 million in normalised run-rate rental income, of which public tenants

constitute approximately 92 per cent. The company intends to be an active

consolidator in the market. With a strong balance sheet, it pursues an

opportunistic growth strategy.