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Kaupthing Bank The boards of directors of Kaupthing Bank hf. ("Kaupthing") and the Reykjavik Savings Bank hf. ("SPRON") have agreed on a merger schedule, according to which Kaupthing will take over SPRON's assets and liabilities by a merger. The merger will have an insignificant impact on Kaupthing's total size on a consolidated basis.
Upon the merger, SPRON shareholders will receive a payment which is equivalent to the market price of shares in SPRON at the close of trading on 30 June 2008 plus a 15% premium. This equates to payment of ISK 3.83 for each share in SPRON. The payment will be structured as follows: 60% will be in the form of shares in Exista hf. and 40% will be in the form of shares in Kaupthing.
In the opinion of the boards of directors of Kaupthing and SPRON, the merger will have a positive impact on the operations of both companies in Iceland. It will improve services and increase the profitability of operations and value for the companies' shareholders. The financial market unrest of the past months has highlighted the need to place greater emphasis on improving operating efficiency and reining in costs of financial companies. The integration of Kaupthing and SPRON is a response to the changing operating environment and will strengthen the operations of both companies in the Icelandic financial market. Upon merging, emphasis will be placed on maintaining the special status and market positions of both companies. The branches of both banks will continue to operate under their own brand names.
Conditions of the merger, SPRON shareholders' meeting and timing of the merger
The merger is subject to the approval of a shareholders' meeting in SPRON and the Icelandic Financial Supervisory Authority. The merger is also subject to the competition authorities not rejecting it or imposing conditions which the boards of directors of the companies consider unacceptable or which would make it inevitable to resubmit the merger proposal to a SPRON shareholders' meeting. The creditors' approval of the merger has already been obtained. The SPRON shareholders' meeting is scheduled for the beginning of August. The opinion of an external financial company on the payment to be made for the share capital in SPRON in the merger will be submitted at that meeting.
The merged company will not assume the operations, assets and liabilities, or the rights and obligations of SPRON until all the conditions of the merger have been met.
Payment to SPRON shareholders
Upon the merger, shareholders in SPRON will receive 0.002007864 shares in Kaupthing Bank hf. and 0.305585106 shares in Exista hf. as payment for each share of a nominal value of ISK 1 in SPRON. No payment will be made for SPRON own shares. SPRON shareholders will be given the option of exchanging the said shares internally, through Kaupthing's intermediation, free of commission for two weeks after the settlement of the acquisition price, at the market price current at that time. The price corresponds to the listed closing price of Kaupthing and Exista shares on 30 June 2008, or ISK 763 for each share in Kaupthing and ISK 7.52 for each share in Exista. The payment to SPRON shareholders is equivalent to ISK 3.83 for each share in SPRON and will be paid to SPRON shareholders once the conditions of the merger have been met.
Kaupthing has made an agreement on the acquisition of 832,737,199 Exista shares from SPRON (340,965,708 shares), on the one hand, and the Kista Investment Company (Kista-fjárfestingarfélag) (491,771,491 shares) on the other, which will be used as payment in the merger, and the acquisition of these shares is subject to the same conditions as the merger itself. The price of the shares in this transaction is based on the above price, i.e. the listed closing price of Exista shares on 30 June 2008, or ISK 7.52 for each share.
The merged company
There will be no changes to Kaupthing's articles of association following the merger nor to its listing on the OMX Nordic Exchange in Iceland or in Stockholm. No new share capital will be issued by Kaupthing in connection with this merger. The subsidiaries of SPRON will become the subsidiaries of the merged company.
Company data as of 31 March 2008
Kaupþing: Equity ISK 416.9 billion Total assets ISK 6,368.4 billion Number of employees 3,324
SPRON: Equity ISK 17.8 billion Total assets ISK 254.7 billion Number of employees 295
Key dates
- Merger schedule approved by the boards of directors of both companies on 1 July 2008. - SPRON's shareholders' meeting is scheduled for the beginning of August. - The merged company will assume the operations, assets and liabilities, as well as the rights and obligations of SPRON once all of the conditions of the merger have been met.
For further information please contact: Ingólfur Helgason, CEO of Kaupthing in Iceland, tel. +354 444-6121 Gudmundur Hauksson, CEO of SPRON, tel. +354 550-1200 Jónas Sigurgeirsson, Chief Communications Officer, +354 444 6112 or ir@kaupthing.com Jóna Ann Pétursdóttir, Head of Public Relations at SPRON, tel. +354 840-8225 or ir@spron.is
About Kaupthing Bank Kaupthing Bank is a northern European bank offering integrated financial services to companies, institutional investors and individuals. Kaupthing operates in fourteen countries, including all of the Nordic countries, Luxembourg, Belgium, the United Kingdom and the Isle of Man, Switzerland, Germany, the United States, the Dubai International Financial Centre (DIFC) and the Qatar Financial Centre (QFC). Kaupthing also has a retail banking operation in Iceland with 34 branches across the country. Its headquarters are in Reykjavík. www.kaupthing.com
About SPRON SPRON is a financial institution which offers retail and investment banking services to individuals, businesses and professional investors in the greater Reykjavik area. SPRON's main subsidiaries are SPRON Securities, SPRON Factoring, Netbankinn and the Frjálsi Investment Bank. SPRON operates seven branches in the capital area.
