Instabank — M&A Activity 2022

Mar 28, 2022

The Board of Instabank unanimously recommends a voluntary cash offer from Lunar to acquire all shares of Instabank

The Board of Instabank unanimously recommends a voluntary cash offer from Lunar to acquire all shares of Instabank

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, INTO OR WITHIN THE UNITED STATES, CANADA, AUSTRALIA, JAPAN OR ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL

The Board of Instabank unanimously recommends a voluntary cash offer from Lunar to acquire all shares of Instabank

Aarhus/Oslo, 28 March 2022

The Board of Directors of Instabank ASA (“Instabank”) announces an agreement with Lunar Group A/S (“Lunar”) where Lunar Bank (“Lunar Bank”), a subsidiary of Lunar Group, will put forward a voluntary cash offer (the “Offer”) to acquire 100% of the shares of Instabank ASA (“Instabank”).

The consideration offered is NOK 3.75 per share, representing a premium of 56.3% and 63.8% to the closing share price on 25 March and the three month VWAP, respectively, and values the total share capital of Instabank to NOK 1,290 million on a fully diluted basis. The offered price is Lunar’s best and final offer price for Instabank.

Lunar and Instabank have entered into a transaction agreement regarding the acquisition, and the Instabank Board of Directors has unanimously decided to recommend the Offer. Shareholders representing 72.7% of the outstanding share capital of Instabank have undertaken to accept the Offer for their shares in the company, including all of the top 10 shareholders, as well as all members of management and the Board of Directors.

Lunar is one of Europe’s fastest growing fintech companies and challenger banks. Founded in Denmark in 2015, Lunar today serves more than 450,000 consumers and businesses throughout the Nordics and empowers them to bank, pay and invest in a new way. Lunar is backed by multiple renowned investors, including Heartland, Kinnevik and Tencent.

Similarly to Instabank, Lunar is a digital-first financial services challenger that aims to serve customers in an easy, affordable and transparent way. This common background, the respective companies’ geographical exposure and as well as the products of Lunar and Instabank complement each other very well. By joining Lunar, the Instabank team will receive full support to continue and accelerate its impressive journey so far.

Robert Berg, Co-Founder and CEO of Instabank, comments: “We are excited over the opportunity to become part of Lunar and together challenge, innovate and build an even stronger Nordic entity. We are convinced that the joint companies will benefit our customers, employees and stakeholders. We are impressed with the Lunar team, products and customer solutions and their great achievements in both the tech and banking sector. Teamed together we will lead the transformation of the Nordic banking markets, both for private and business customers, and offer banking services in a new and better way - the Lunar way”

Cathrin Nylander, Chair of the Instabank Board of Directors, comments: "The Board of Directors is of the opinion that the Lunar offer reflects the strong financial performance, continued growth and solid position of Instabank, and represents an attractive valuation for the shareholders. We believe that a combination of Instabank and Lunar will be a strong Nordic fintech attractively positioned to compete with the Nordic banking leaders"

Ken Villum Klausen, Founder and CEO of Lunar, comments: “We are excited for the opportunity to join forces with Instabank and together challenge, innovate and build a stronger Nordic entity that will benefit our customers. We are impressed with the Instabank team and together we can lead the change the Nordic banking markets need”

Key terms and conditions of the Offer:

The Offer Price of NOK 3.75 per share values Instabank to a total of NOK 1,290 million on a fully diluted basis, and represents:

• A premium of 56.3% to the closing price of the Instabank share on 25 March 2022 of NOK 2.40

• A premium of 63.8% to the volume weighted average share price of the Instabank share during the last three months until and including 25 March 2022 of NOK 2.29

• A premium of 70.6% to the volume weighted average share price of the Instabank share during the last 6 months up until and including 25 March 2022 of NOK 2.20

• A P/E on 2021 earnings of 16.1x on a fully diluted basis, and a P/B based on year-end 2021 book equity of 2.1x on a fully diluted basis

The Offer Price will be reduced by the amount of any dividend or other distributions made by Instabank.

Completion of the Offer will inter alia be subject to the following conditions being satisfied or waived by Lunar:

• The Offer shall have been accepted by shareholders of Instabank representing more than 90% of the issued and outstanding share capital (which may not be waived by Lunar to below an acceptance level of 2/3rd of the issued and outstanding share capital)

• All consents and approvals required from applicable financial regulatory authorities in connection with the Offer shall have been obtained on terms satisfactory to Lunar

• No material adverse change having occurred

• The Instabank Board of Directors shall not have amended or withdrawn its recommendation of the Offer

The Offer does not contain any conditions related to financing or due diligence.

The complete details of the Offer, including all terms and conditions, can be found in the offer document prepared by Lunar (the “Offer Document”), which will be sent to all Instabank shareholders. Additionally, the Offer Document is available on www.abgsc.com.

The offer period will commence on 28 March 2022 and expire on 11 April 2022. Barring any unforeseen circumstances, it is expected that the Offer will be completed in the second quarter of 2022 following receipt of regulatory approval.

Background and strategic rationale:

Both Instabank and Lunar are digital-first financial services challengers aiming to serve customers in an easy, affordable and transparent way. This common background and the combined geographical exposure, coupled with a highly complementary product suite will create:

• A strong challenger with a pan-Nordic scale, combining Instabank’s position in Norway and Finland with Lunar’s position in Denmark and Sweden

• A high-quality provider of financial services with a leading offering within banking, credit, services and features, an exceptional starting point to realise the inherent growth potential of both Instabank and Lunar as one, and a unique platform to leveraging cross-sales, up-sales and further business expansion

• A leading challenger in the Nordics, one of the world’s most profitable banking markets, with the potential to differentiate and create customer value, through leveraging a state-of-the-art digital customer experience

• A combined provider of financial services with the potential to capitalise on the EUR 2 trillion European market for financial services and embedded finance

Lunar and Instabank are highly excited about the potential transaction and believe that a combination will create a best-in-class financial services challenger with a pan-Nordic presence, scaled for growth. Lunar is highly impressed by the achievements of the Instabank team, and the combined company will continue to be in need of competent people in order to execute on the ambitious growth strategy, and be able to offer the Instabank team an exciting journey ahead.

Contact info

Robert Berg, Co-Founder and CEO of Instabank,

Phone: +47 974 85 610

Ken Villum Klausen, Founder and CEO of Lunar

Phone: +45 20 68 45 10

Advisors

Pareto Securities is acting as financial advisor and Advokatfirmaet Thommessen as legal advisor to Instabank.

ABG Sundal Collier is acting as financial advisor and Schjødt as legal advisor to Lunar.