Shares of Spar Nord Bank surged nearly 46% in Copenhagen on Tuesday midmorning following the announcement that Danish lender Nykredit Realkredit has agreed to acquire it, a deal that will establish the third-largest bank in Denmark. Nykredit will make a voluntary public tender offer for all shares in Spar Nord Bank at 210 Danish kroner apiece in cash, valuing Spar Nord Bank at 24.7 billion kroner.
The offer represents a substantial 49% premium to Spar Nord's closing share price from Monday. The merger is projected to lead to a combined total lending of 160 billion kroner by the third quarter of 2024, suggesting a 13% market share in lending and an 11% share in deposits. The board of Spar Nord Bank is expected to unanimously recommend that shareholders accept the offer once it is formally submitted and approved by the Danish Financial Supervisory Authority.
Nykredit, which currently holds a 19.60% interest in Spar Nord Bank, has already secured binding and irrevocable advance acceptance commitments from the Spar Nord Foundation, which owns a 20.27% stake in the target company. "Both Spar Nord Bank and Nykredit are expanding in the banking market. By joining forces, we will achieve the scale that is increasingly vital in a market experiencing heightened regulation, growing digitalization, and pressure on pricing," stated Michael Rasmussen, Nykredit Group Chief Executive.
"Moreover, scale advantages allow us to strengthen our position in the market and sustain our growth." The completion of Nykredit's offer hinges on specific conditions being met, including regulatory approvals and shareholder acceptances for at least 67% of Spar Nord Bank's total shares and voting rights.
If Nykredit garners over 90% ownership, it will initiate a compulsory acquisition of any remaining shares and will seek to delist Spar Nord Bank from Nasdaq Copenhagen. This acquisition is anticipated to finalize in the first half of 2025, with Nykredit asserting that it has no immediate plans to merge branches during that year.
The existing headquarters of Nykredit is set to serve as the head office for the newly formed entity..