Published: 2016-05-02 07:45:00 CEST
LHV Group
Company Announcement

AS LHV Varahaldus finalizes the purchase of Danske Capital AS, Danske Bank A/S’s Estonian-established asset management company

Today, on 2nd May 2016, the transaction is finalized as a result of which a subsidiary of AS LHV Group, AS LHV Varahaldus shall purchase 100% of the shares of Danske Capital AS from Danske Bank A/S. The share purchase agreement was signed on January 29, 2016. In order to finance the transaction, AS LHV Varahaldus increased its share capital in February by EUR 8.243 million, issuing new shares for its parent company, AS LHV Group. Additionally, AS LHV Group purchased subordinated bonds of AS LHV Varahaldus in the amount of EUR 0.6 million. The preliminary price for the 100% shareholding in Danske Capital AS has been set at EUR 11.0 million with the price consisting of a fixed amount of EUR 6.6 million and the size of the equity capital as at the end of March. The final price shall be determined within 45 business days following the transaction after the balance sheet of Danske Capital AS as at 30 April has been audited.

Following the transaction, the merger of the two asset management companies - Danske Capital AS and AS LHV Varahaldus – shall be initiated. Of the merging companies, the receiving company shall be AS LHV Varahaldus and the transferring company, Danske Capital AS. A notarised merger agreement shall be entered into and published on May 3, 2016. The merger shall become effective after an authorisation for the merger has been granted by the Estonian Financial Supervision Authority (Finantsinspektsioon). Following the merger, Danske Capital AS shall be deemed to be dissolved, and the receiving company shall continue its activities under the name of Aktsiaselts LHV Varahaldus. There shall be no material change in the activities, technical setup or structure of AS LHV Varahaldus following the merger, compared to those prior to the merger.

After the merger of the companies, expectedly becoming effective in Q3, LHV Varahaldus plans to begin the process of merging the pension funds of similar investment strategy. Considering the plan to merge the companies and later on the pension funds of similar strategy, the operations, structure and technical setup of Danske Capital AS shall be matched to those of AS LHV Varahaldus already prior to the merger. Inter alia, the managers of AS LHV Varahaldus shall be appointed to the same positions in Danske Capital AS (Erkki Raasuke, Andres Viisemann, Erki Kilu on the supervisory board, and Mihkel Oja, Joel Kukemelk on the management board). The existing members of both the supervisory and management board of Danske Capital AS shall be removed. The supervisory board of Danske Capital shall decide on outsourcing the internal audit function to AS LHV Varahaldus and its internal auditors Relika Mell and Karin Kuusk.

“After today’s transaction, the number of clients saving in the LHV II pillar pension funds shall be increased by 30% and the volume of LHV pension funds shall be increased by 40%. The merger of the asset management companies contributes to our goal of providing the best long-term investment service to the clients of the II pillar pension funds,” said Mihkel Oja, the chairman of the management board of LHV Varahaldus.

Danske Capital AS manages three mandatory and two voluntary pension funds. As at the moment of the transaction, Danske Capital manages pension assets in the amount of 250 million euros with 39 thousand active clients belonging to Danske mandatory pension funds. LHV Varahaldus manages five mandatory pension funds, one voluntary pension fund, one UCITS and provides investment management services for a UCITS established in Luxembourg. There are over 130 thousand active clients in LHV pension funds with the AUM of the management company currently being EUR 610 million.

AS LHV Varahaldus and AS LHV Group have received an authorisation for the acquisition of a qualifying holding from the Estonian Financial Supervision Authority and AS LHV Varahaldus and Danske Capital AS have received an authorisation for concentration from the Competition Authority, both of which were conditions precedent for the finalization of the transaction.

         Priit Rum
         Communication Manager
         GSM: +372 502 0786
         Julia Garanža
         Communications and Marketing Manager
         AS LHV Varahaldus
         GSM: +372 5668 1622