Entra Mulls $3.5 Billion Castellum Bid After Earlier Snubs

Entra ASA, a Norwegian property firm, said it will look into a takeover proposal by Castellum AB after ending earlier talks with the firm and rebutting a bid by a rival suitor.

Entra, which specializes in office spaces, said it will “diligently consider” the latest proposal, in a statement on Thursday. The company highlighted a decision by Norway’s government to sell its 8.2% stake to Castellum, as part of its decision-making process.

Entra this week became the target of multiple bids, in a sign that demand for office property is heating up despite the pandemic. SBB, another Swedish real estate firm, was first to announce an offer. Castellum’s proposal is about 3.6% higher than SBB’s, representing a total value of about 31.1 billion kroner ($3.5 billion).

But SBB is ready to pay 70% cash and 30% shares, while Castellum’s offer is about 85% stock, including new issuance, and 15% cash. SBB’s share price is up about 27% this year, while Castellum’s is down about 2%.


SBB has secured financing support from Goldman Sachs, while Castellum has JPMorgan and Danske Bank.

Ilija Batljan, the chief executive officer of SBB, says he’s not giving up. He argues SBB’s offer is superior because more of it is in cash.

“I’m very confident with our offer, which is the highest, and that we will reach 90% acceptance,” Batljan said by phone. “Castellum’s offer is like gambling at the casino, it’s dependent on how the share price moves.”

But analysts said Castellum might be better positioned to push through the deal.

“Castellum’s attempt to merge the two companies looks more realistic and structured, compared with SBB’s deal structure,” analysts at Handelsbanken said in a note to clients. They pointed to the Norwegian government’s decision to sell its stake to Castellum. “We assume this bid will be better received by the board of Entra,” they said.

Government Blessing

Norway’s government appeared to give Castellum its blessing, in a separate statement on Thursday.

“A merged entity will become a leading Nordic real estate company, so this seems right, both from an industrial and financial perspective,” Norway’s trade and industry minister, Iselin Nybo, said.

Read: SBB’s $3.3 Billion Bid for Entra Snubbed Amid Rival Proposal

Castellum said its offer isn’t conditional on financing, due diligence or antitrust approvals. If successful, it expects to be able to conclude the deal by the first quarter, it said.

Entra has so far indicated it doesn’t want to be bought by anyone. The company said earlier this week it “appreciates the strategic interest,” but that “the board believes that Entra has a bright future as an independent company.”

By mid-afternoon on Thursday, its shares were trading up about 4% at 175.20 kroner. That’s higher than SBB’s 165 krone bid, and even tops Castellum’s 170.86 krone offer.

The development puts a spotlight on the growing demand for office space, despite the pandemic. Entra owns about 90 predominantly office properties around Norway, spread across its four largest cities.

The acceptance period starts after publication of Castellum’s offer, and is expected to last for 20 business days, subject to amendments, it said.

©2020 Bloomberg L.P.

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