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Blackstone joins Luminor shareholder roster
Posted on Thursday, 13 September 2018 12:47
Nordea and DNB are selling a majority stake in Luminor to a Blackstone-led consortium for EUR 1.00 billion but will each retain a fifth of the third-largest financial services provider in the Baltics.

The Swedish lender has already entered into a forward sale agreement with the private equity house for the sale of its remaining 20.0 per cent over the near-to-medium term.

Nordea’s decision to exit the company, which was formed through the merger of its Baltic operations with that of DNB in 2016, is part of a strategy to simplify and focus operations on core Nordic markets.

In a statement, the organisation said the upfront sale of a 36.0 per cent stake is worth about EUR 600.00 million.

This purchase price equates to a multiple of 1.0 times price to book value (P/BV), based on Luminor generating a mid-single digit normalised return of equity of EUR 1.70 billion.

Nordea’s forward sale of its remaining 20.0 per cent will be carried out at a fixed valuation of 0.9 times P/BV, corresponding to an estimated blended sales multiple of 0.97 times P/BV.

On a pro-forma basis, and subject to regulatory capital treatment, the upfront disposal is expected to have a positive impact on the financial group’s common equity tier 1 (CET1) ratio of 20.00 basis points.

DNB will trim its 43.5 per cent stake to 20.0 per cent, and intends to remain as a minority owner in the Baltics bank with about 23.0 per cent lending market share.

Luminor has a portfolio of EUR 12.00 billion, holds over EUR 8.00 billion of customer deposits and total equity of EUR 1.70 billion.

Blackstone said the investment represents the largest majority stake purchase of a universal bank by private equity in the last decade globally, and one of the largest mergers and acquisitions transactions in Baltic history.

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