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Danske Andelskassers Bank deems Spar Nord Bank takeover bid 'not attractive'

The board of Danske Andelskassers Bank A/S has rejected a takeover bid from fellow Danish lender Spar Nord Bank A/S.

Spar Nord Bank on March 1 proposed to fully take over its Danish peer and offered to pay 7.75 Danish kroner per share in Danske Andelskassers Bank, in which Spar Nord Bank already controls 30.89% of the total share capital and voting rights. Overall, the offer price valued Danske Andelskassers Bank at approximately 1.13 billion kroner.

The board said Spar Nord Bank's offer is "not attractive," noting that a stand-alone scenario would be more attractive than the offer, according to a March 25 statement. The offer will also lead to mass redundancies and closure of regional branches.

Shareholders were thus recommended not to accept Spar Nord Bank's takeover bid, as it is not in the interest of the bank and its shareholders, as well as its customers and employees.

Better alternatives exist for the lender than Spar Nord Bank's offer, the board said, including more equal mergers with other financial institutions.

In a March 26 response, Spar Nord Bank said it has resolved to ask for the Danish Financial Supervisory Authority's permission not to submit its intended offer.

The lender said it was "surprised" that Danske Andelskassers Bank's board resolved to reject its yet-unpublished voluntary conditional offer in advance, noting that the reasons outlined for the rejection "are not in accordance with the facts of the matter."

Spar Nord Bank pointed out, among other things, that Danske Andelskassers Bank's statement that the potential takeover will lead to mass redundancies and branch closures is contrary to what is stated in the draft document it prepared.

Danske Andelskassers Bank also announced that it has completed a directed issue of shares to an undisclosed group of investors. As a result, Spar Nord Bank said the lender does not meet the condition set out in the offer about Danske Andelskassers Bank not exercising its authority to increase its share capital, thereby making it impossible for Spar Nord Bank to obtain a satisfactory proportion of the share capital and voting rights in the lender.

After completion of the directed issue of shares, Spar Nord Bank's stake in the lender will be 27.2% of the share capital and voting rights.

"We regret that we have failed to establish a dialogue with the DAB management on the benefits that both parties could reap from combining our two businesses. We are confident that we had a good solution for customers, shareholders, employees and local communities, but unfortunately, DAB has not been interested in discussing the opportunity with us," Spar Nord Bank CEO Lasse Nyby said.

Meanwhile, Danske Andelskassers Bank upgraded its expectations for 2019, with core earnings expected to be in the range of 135 million kroner to 165 million kroner and pretax profit estimated to be between 300 million kroner and 355 million kroner.

The bank previously expected core earnings and pretax profit to be in the range of 120 million kroner to 160 million kroner, and between 70 million kroner and 130 million kroner, respectively.

As of March 25, US$1 was equivalent to 6.60 Danish kroner.