Ratos has concluded an agreement with Fabege to sell its holding in the real estate company Tornet for SEK 1.2 billion, corresponding to SEK 146 per Tornet share. The sale is expected to be carried out during January.
Ratos (40 %) acquired an 82.4 % stake in Tornet in December 2003, together with Lehman Brothers Real Estate Partners ("LBREP") (60%), through the jointly owned company LRT Acquisition. Together with LBREP, Ratos has changed Tornet's strategy, and over the past eighteen months the company has concentrated its property portfolio to Stockholm, Gothenburg and Malmö.
The transfer will be effected by Ratos and LBREP selling their holdings in LRT Acquisition. Ratos' capital gain, calculated on the book value of the holding in LRT Acquisition at 30 September 2005 and adjusted for proceeds from Tornet's reduction of share capital in October 2005, is expected to amount to just below SEK 800 million. The final capital gain will, among other things, be adjusted for Ratos's share of the profit in the LRT group during the fourth quarter of 2005. The average annual return (IRR) from the investment in Tornet has been 70 %.
The sale is among other things subject to approval from the competition authorities. Fabege has also undertaken to make an offer of SEK 146 per share to Tornet's other shareholders within 21 days from the closing of this transaction.