Two of Sweden’s top property groups, Castellum and Diligentia, have announced a merger which will put them on an equal footing with the country’s largest property company Drott.
The deal, in the form of an all-share offer by Castellum, has been approved by Diligentia’s board and over 12% of its shareholders have already said they will accept the offer of one new Castellum share for each Diligentia share held. Small shareholders are being offered a SKr79 per share cash alternative.
The merged company will own assets totalling SKr20bn.
Lark-Erik Janssen, who will become Castellum’s new chief executive, says the deal will create around SKr100m of cost savings over the next three years and enhance earnings over the same period.
The management also expects the deal to improve the enlarged group’s share price performance. Castellum’s shares have been trading at a discount of 23% to NAV, against the sector average of 20%.
Rival Drott’s shares trade at a discount of just 5-6%, and analysts say the deal should have an immediate positive impact on Castellum’s share price.
