Denmark-based mortgage credit institution Nykredit Realkredit has revealed plans to assume full ownership of Spar Nord Bank in a deal that values the latter at DKK24.7bn ($3.5bn).
Under the terms of the agreement, Nykredit Realkredit will make a voluntary public tender offer to purchase all outstanding shares in the Danish bank, excluding treasury shares. The offer will be made at a price of DKK210 ($30) per share.
The offer price represents a 49% premium over Spar Nord Bank’s closing share price on 9 December 2024 and a 58% premium above the three-month volume-weighted average trading price.
Based in Copenhagen, Nykredit Realkredit offers mortgage financing for private individuals and businesses.
The company, along with its wholly owned subsidiary Totalkredit, is said to hold a leading position in the Danish mortgage credit market, boasting a market share of approximately 45.2%.
Currently, Nykredit Realkredit holds 19.6% of Spar Nord Bank’s share capital. It has also secured commitments amounting to 40.17% of the bank’s voting rights.
Spar Nord Bank’s board of directors has indicated its intention to recommend the offer to shareholders following its approval by the Danish Financial Supervisory Authority (FSA).
The Spar Nord Foundation, which owns 20.27% of the bank’s shares, and members of the board and executive management, holding a collective 0.3%, have already committed to accepting the offer, subject to specific conditions.
The merger is intended to combine Nykredit Bank and Spar Nord Bank to strengthen their market position and expand their customer base.
Together, the two banks are projected to have a combined lending volume of approximately DKK160bn ($22.6bn) and a 13% market share in Denmark’s lending sector.
The joint entity will also benefit from shared operational platforms, such as the Bankernes EDB Central (BEC) data processing system, and other collaborative synergies.
Nykredit Realkredit chairman Merete Eldrup said: “Spar Nord Bank and Nykredit are a strong match. Each of us has values and core competencies that, combined, will increase our impact in the market.
“Spar Nord Bank has a long tradition as a locally anchored relationship bank with decentralised decision-making powers and special strengths in the personal customer and the small and medium-sized business customer segments.”
Nykredit Realkredit has stated that the merger aims to ensure a seamless experience for customers, with minimal disruptions to direct customer services. It also does not plan to merge branches in 2025.
The offer document is expected to be published within four weeks, with the acceptance period running for six weeks from publication.
If Nykredit Realkredit secures a 90% ownership stake, the company plans to delist Spar Nord Bank from Nasdaq Copenhagen and initiate a compulsory acquisition of remaining shares.
Subject to achieving at least 67% shareholder acceptance and regulatory approvals from the FSA and the Danish Competition and Consumer Authority, the transaction is expected to close in the first half of 2025.
