The Board of Directors of Sagax has, based on the authorization granted by the annual general meeting on 9 May 2023, and in accordance with the Company's press release earlier today, resolved on a directed issue of 10,000,000 common shares of Class B. Through the Share issue, Sagax will raise SEK 2,120 million before issue costs. The subscription price has been set to SEK 212 per share through an accelerated book building procedure. The subscription price corresponds to a discount of 3.6 percent in relation to the volume weighted average share price the last 10 trading days and 6.2 percent in relation to the closing price on 13 November 2023 on Nasdaq Stockholm. The Share issue was subscribed by Swedish and international professional and institutional investors.
Sagax is a property company focusing on commercial properties primarily within the warehouse and light industrial segment. Sagax invests mainly in properties with stable cash flows located in European metropolitan areas. Historically, Sagax has expanded via small and medium-sized transactions. During the period 2020 to 2022, Sagax invested SEK 13.6 billion through 138 separate transactions. During 2023, Sagax has invested SEK 5.4 billion through 31 separate transactions in 7 countries.
Sagax believes that the Company's investment strategy will continue to contribute to the growth of the profit from property management per share, which on average has been 21 percent per year during the past 5 years, and that the current market environment could present additional attractive investment opportunities for Sagax shareholders. At the same time, Sagax appreciates that external risk levels are elevated and that financial markets are volatile. Therefore, the Company is committed to maintain a conservative capital structure and a strong liquidity position while taking advantage of investment opportunities deemed value-creating for the shareholders.
It is the Board of Directors’ assessment that the Share issue would result in higher profit from property management, cash flow, and net asset value per share after the proceeds from the Share issue have been invested. In light of this, the Company has carried out the Share issue.
The Board of Directors has carefully considered the possibility to raise capital through a rights issue and makes the assessment that there are currently several reasons why it is more beneficial for the shareholders to raise capital through a directed share issue. A rights issue could have a negative impact on the Company, for example it would entail higher costs for the Company and take significantly longer time to carry out, which, especially in the current market conditions, would involve an exposure to potential market volatility. Furthermore, the Company wishes to expand and strengthen its base of institutional shareholders, with the aim of strengthening the liquidity of the Company's share. The Board of Directors' assessment is thus that an issue of shares with deviation from the shareholders' preferential rights is the most suitable alternative.
The subscription price and the number of new common shares of Class B was determined through an accelerated book building procedure conducted by ABG Sundal Collier AB and J.P. Morgan SE (jointly, the "Joint Bookrunners"). By establishing the subscription price through an accelerated book building procedure to professional and institutional investors, it is the assessment of the Board of Directors that the subscription price accurately reflects current market conditions and demand. The Board of Directors therefore makes the assessment that the subscription price has been determined in such a way that market terms have been ensured.
The Share issue increases the total number of shares in Sagax by 10,000,000, from 456,595,984 to 466,595,984, divided between 26,540,334 Class A common shares, 313,794,321 Class B common shares and 126,261,329 Class D common shares, the total number of votes increases by 1,000,000, from 69,545,899 to 70,545,899 and the share capital increases by SEK 17,500,000, from SEK 799,042,972 to SEK 816,542,972, which leads to a dilution effect of 2.14 percent based on the total number of shares in Sagax after the Share issue and 1.42 percent based on the total number of votes in Sagax after the Share issue.
The Company has undertaken not to, during a period of 90 calendar days after the settlement date of the Share issue, without the consent of the Joint Bookrunners, propose or issue further shares, with certain customary exceptions.
Furthermore, the Company's board members and senior executives have undertaken not to, with certain exceptions, without the consent of the Joint Bookrunners, sell or in other ways dispose of their shares in the Company for a period of 90 calendar days following settlement of the Share issue.
ABG Sundal Collier AB and J.P. Morgan SE act as Joint Global Coordinators and Joint Bookrunners in connection with the Share issue. Cirio Advokatbyrå AB acts as legal advisor to the Company and Baker & McKenzie Advokatbyrå KB as legal advisor to the Joint Global Coordinators and Joint Bookrunners.