(July 9): Finnish retail lender S-Bank Plc agreed to buy rival Oma Savings Bank Plc for €17.20 (US$19.67) a share, seeking to create a larger retail lending group in the Nordic country.
S-Bank’s recommended voluntary cash tender offer values Oma Savings Bank’s equity at about €571 million, according to a statement Thursday. The lender said it aims to acquire all issued and outstanding shares and delist the company from Nasdaq Helsinki.
The two banks mainly serve retail clients, offering regular banking services and mortgages. S-Bank, with more than 850,000 active customers, is owned by the cooperative S Group, and Oma has about 200,000 personal and corporate clients.
The proposed tie-up adds to consolidation in Nordic banking. Last year, Denmark’s Sydbank A/S agreed to buy Arbejdernes Landsbank A/S and Vestjysk Bank A/S, strengthening its position as Denmark’s fifth-largest lender.
Rationale for the acquisition is growth in size, enabling investments in developing the company “in an operating environment where customer expectations and the demands placed on banking are continuously growing,” S-Bank chief executive officer Riikka Laine-Tolonen said in the statement.
Laine-Tolonen also said the acquisition would create better conditions for expanding S-Bank’s corporate banking business.
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The offer represents a premium of about 47% to Oma Savings Bank’s July 8 closing price and about 52.5% to the stock’s volume-weighted average price over the past 12 months.
Oma Savings Bank’s board unanimously recommended shareholders accept the bid, supported by a fairness opinion from EY Advisory, and about 60% of its shareholders have given irrevocable undertakings to sell their shares.
S-Bank expects the transaction to be completed in the fourth quarter. It said the deal is not expected to have any immediate material effect on Oma Savings Bank’s operations, employees or branch network, though it intends to change the board after completion while keeping the lender as a subsidiary.
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