The mandatory cash offer is at the same level as Hembla's acquisition of Blackstone's shareholding (corresponding to 69.3 percent of the votes and 61.2 percent of the capital).

Since the Blackstone acquisition, Vonovia has continued to buy shares in the market and now owns 72.3 percent of the votes and 65.0 percent of the capital in Hembla.

Hembla's independent bid committee, led by board member Patrick Forslund, now recommends the owners to refuse Vonovia's bid obligation bid.

"Following an overall assessment, the Committee is of the opinion that the Offer does not fully reflect Hembla’s growth potential and value from a financial perspective. In light of the above, and on the basis of the current state of the market and interest rate level, the Committee therefore unanimously recommends Hembla’s shareholders to not accept the Offer."

The Committee bases its statement on an overall assessment of a number of factors that the Committee has considered relevant for the evaluation of the Offer. These factors include, but are not limited to:

# Hembla’s current position and expected future development based on the Company’s growth model and possibilities and risks related thereto; 

# Hembla’s average annual growth rate for the last three years, which, in terms of long-term net asset value (EPRA NAV) per share, has amounted to 26.4%;

# Hembla’s share price development, the stock market’s valuation of Hembla, and Hembla’s valuation based on the Offer in relation to other comparable listed real estate companies; and

# Vonovia’s Offer price in relation to other comparable acquisitions of listed real estate companies.  

The Committee notes that the price per share which Vonovia is offering represents:

# a premium of 11.5% compared to the closing price of SEK 192.80 for Hembla’s class B shares on Nasdaq Stockholm on 20 September 2019, which was the last day of trading prior to the announcement of Vonovia’s acquisition of approximately 69.30% of the voting rights and approximately 61.19% of the share capital in Hembla from Blackstone;

# a discount of 0.5% compared to the closing price for Hembla’s class B shares on Nasdaq Stockholm of SEK 216.00 on 6 November 2019, which was the last day of trading prior to the announcement of the Offer; and

# a premium of 9.1% compared to the highest recorded share price for Hembla’s share.

The Committee notes that the price per share offered by Vonovia corresponds to 116.6% of Hembla’s reported EPRA NAV (long-term net asset value) per share of SEK 184.41 as of 30 September 2019.

The Committee further notes that the price per share in Vonovia’s acquisition of shares from Blackstone corresponds to the price per share in the Offer.

The assessment is also based on Handelsbanken’s fairness opinion as to the fairness from a financial perspective of the Offer for the shareholders in Hembla. According to the fairness opinion, which has been attached to this press release, Handelsbanken’s opinion is that the Offer, subject to the conditions and assumptions stated in the opinion, is not considered fair from a financial perspective for the shareholders in Hembla.

Vonovia’s CEO Rolf Buch said:

“We take note of the statement by the independent bid committee that was communicated earlier today. Nevertheless, we believe that the offer is a good opportunity for Hembla shareholders to realize value, and we already control 72.3% of the votes. We also note that the independent bid committee points out that the liquidity in Hembla’s share may become more limited going forward. I am fully convinced that combining Hembla with Vonovia has a strong strategic rationale. Vonovia is committed to the Swedish market and intends to create long-term benefits for tenants by further investing in Hembla’s properties. We are a responsible owner and it is not part of our strategy to realize value through future sales.” 

Vonovia has identified total operational and financial synergies of EUR 30 million. The ability to realize these synergies is purely based on the acquisition of approximately 69.30% of the voting rights in Hembla and is independent of the result of the Offer. Vonovia does therefore not require a successful delisting of Hembla to deliver synergies or to reach any other announced acquisition criteria.