Glitnir banki hf. has announced its intention to make a public tender offer for the shares in FIM Group Corporation in Finland. Glitnir has received an undertaking from the 11 major owners of FIM, who currently hold 68.1% of FIM, to sell their shares to Glitnir.
Glitnir has further announced its intention to make a public offer to acquire all the remaining shares in the company. FIM is a leading asset management firm in Finland with a strategy to grow internationally in the fund management, brokerage and corporate advisory segments. FIM and Glitnir will have a total of €8.5 billion in assets under management in 46 different mutual and investment funds internationally. Combined Glitnir and FIM will be the third largest broker, as ranked by market share of total trading turnover, in the aggregate Nordic equity market. Together there will be 36 research analysts covering 216 companies. Glitnir will have 40% of its employees outside of Iceland, after this transaction, counting FIM's 284 employees.
The consideration offered is €8.00 per share, representing a market capitalisation of €341 million, paid as a combination of cash and new shares in Glitnir or cash only. The value of the Glitnir shares is ISK 24.8 per share being the closing price on the Icelandic Stock Exchange on 15 January 2007. The ISK/EUR exchange rate is 91.44 being the mid rate published by the Icelandic Central Bank on 16 January 2007. Glitnir will finance the deal with equity issuance and with use of cash. Glitnir is well capitalised for this transaction, pro-forma CAD ratio will stand at 14.6 and Tier 1 at 10.3% post acquisition, given that Tier 1 and CAD ratios stood at 10.8% and 15.0% respectively at the end of 2006.
FIM is a leading Finnish investment services group that offers asset management, brokerage and investment banking services for private clients and institutions. Glitnir is a leading Nordic financial group whose services include retail, leasing, corporate and investment banking, brokerage services and asset management. FIM has an experienced and highly recognised asset management team with a total of €3 billion in assets under management with approximately €2 billion in 31 mutual funds. Following Morningstar classification method, 83% of the assets in mutual funds are allocated in equity funds, 3% in balanced funds, 12% in fixed income funds, and 4% in alternative investment funds. Of the 12 rated equity and balanced funds, 7 have a 5 star Morningstar rating.
The acquisition of FIM will be a continuation of Glitnir's recent actions for expanding its geographic platform in the Nordic investment services market. As for Asset Management it will establish the foundation of an international asset management unit within Glitnir. Combined Glitnir will increase its assets under management of 55 percent or to €8.5 billion.
FIM has been a forerunner in investing in emerging markets and it was the first Finnish investment services company to launch mutual funds that invested in the BRIC-countries (Brazil, Russia, India and China). Since 2004 FIM has had its own operation in Moscow.
Together, Glitnir Securities in Norway, Glitnir AB in Sweden and FIM both in Finland and Sweden will comprise a strong team in the Nordic brokerage market. Combined Glitnir and FIM will increase their equity brokerage reach and currently rank the third largest in OMX (also including Oslo) Nordic Stock Exchanges, in equity volume. Glitnir and FIM will have strong research coverage in Finland, in addition to Glitnir's research capacity in Sweden, Norway and Iceland. The combined 36 research analysts in FIM and Glitnir will be covering 216 companies. Glitnir's share of the overall Nordic market will increase from 4.91% to 5.6% with FIM consolidated into the 2006 market share.
The transaction is subject to inter alia approval by the Finnish and Icelandic Financial Supervisory Authorities and Competition Authorities in relevant jurisdictions.
Bjarni Ármannsson, CEO, Glitnir comments: "FIM is a strategic complement to our