EQT Infrastructure V launches offer to acquire all outstanding shares in Torghatten ASA through HATI BidCo AS with recommendation of Board of Directors of Torghatten ASA

23 December 2020: EQT Infrastructure V fund ("EQT Infrastructure") and Torghatten ASA ("Torghatten" or “the Company”) today announced that HATI BidCo AS (the “Offeror”) will launch an offer to acquire all outstanding shares in Torghatten through a voluntary cash offer (the “Offer”).

Founded in 1878, Torghatten is the leading private passenger transportation company in Norway with an annual revenue of approximately NOK 10 billion and about 7000 employees. The Company’s core business is within sea, land and air transportation – distributed across ferries, express boats, buses and air traffic (excluded from the transaction) throughout Norway. Torghatten provides essential services and its route network significantly shortens travel time along the Norwegian coastline, making the Company a critical part of the country’s domestic transportation system.

The offer from the Offeror is at NOK 175 in cash per share in Torghatten, excluding the airline segment. Torghatten plans to distribute the Company’s shares in WF Holding AS (66 %), which owns the airline company Widerøe, through shares in a newly-established subsidiary ("Flyco") to Torghatten’s shareholders prior to or in connection with the execution of the Offer, whereby the shareholders will receive one (1) share in Flyco for every share they own in Torghatten. Each share in Flyco is valued at NOK 17 upon being distributed.

The dividend will be distributed to shareholders in Torghatten registered in VPS per 22 December 2020, which means that it will not be possible to acquire new shares in Torghatten with rights to dividends.

Based upon this valuation, the Offer and distribution of shares in Flyco values each Torghatten share at NOK 192.

The Board of Directors of Torghatten has unanimously decided to recommend that Torghatten’s shareholders accept  the Offer, and the Offeror has entered into agreements on certain terms to acquire shares from Torghatten’s largest shareholders, which represent approximately 53.62 percent of the total issued and outstanding shares of Torghatten. The share purchase agreements include the same purchase price per share as those sold through the Offer and the completion of these agreements is notably contingent upon the completion of the Offer.

EQT Infrastructure has followed Torghatten closely for many years and is impressed with its development over the last decade with respect to growth, profitability, and sustainability work. Subject to completion of the Offer, EQT Infrastructure intends to support Torghatten’s continued value creation journey through both organic and inorganic growth initiatives. Moreover, EQT Infrastructure is committed to support Torghatten’s ambitious sustainability agenda and the intention to accelerate the transition to zero or low emission transportation infrastructure in line with government targets, based on battery, biofuel, hybrid and other new technologies.

Daniel Pérez, partner at EQT Partners and Investment Advisor to EQT Infrastructure, states: ”Torghatten is a remarkable success story and plays a significant role in many cities and small local communities across large parts of Norway. EQT is impressed with the Company’s development over the past decade with regards to growth, profitability and sustainability efforts. Chairman Brynjar Forbergskog and CEO Roger Granheim deserve a great deal of the credit for this. They have transformed Torghatten from a regional, northern-focused company to becoming a major national transport player. We will use EQT's financial strength and extensive experience within transport infrastructure to further develop Torghatten's critical services and sustainability profile, to the benefit of Torghatten's customers, employees and partners across the country.”

Chairman Brynjar Forbergskog of Torghatten says: “Since we were first approached by EQT, we have had discussions with several interested parties, but EQT’s offer stands out as the best alternative for both the owners and for Torghatten. The Board believes that EQT will succeed in further developing the Company and its operations in a good way. EQT Infrastructure wishes to be an active owner of Torghatten and will provide EQT’s resources, competency and network to ensure continued profitable growth. EQT has also informed the owners that they do not intend to move Torghatten’s headquarters nor change the company name. A unanimous Board recommends EQT Infrastructure’s offer.”

CEO Roger Granheim of Torghatten says: “I expect EQT Infrastructure will be a good owner that will execute a sustainable growth strategy to develop Torghatten going forward, from an environmental, social and economic perspective. Throughout this process, EQT has demonstrated its understanding of the important role Torghatten plays in many cities and local communities across large parts of Norway, and that it will continue to build on today’s solid culture and foundation.”

The value of the offer (the offer price and the value of the Flyco shares) of NOK 192 per share represents a premium of 14 % compared to the last registered trading price of the Torghatten shares on the NOTC. The Valuation further represents a premium of 17 %, 32 %, 41 % and 48 % compared to the volume-weighted average price (VWAP) of Torghatten for the 1-month, 3-month, 6-month and 12-month period prior to 22 December 2020 respectively, and a  13 % premium to the highest registered trading price for the Torghatten shares.

The Offer values the total equity of Torghatten at approximately NOK 8,580 million based on shares outstanding.

The Offeror is owned by EQT Infrastructure V fund, which is managed by the leading investment organization EQT, headquartered in Stockholm, Sweden.  EQT was founded in 1994 together with Investor AB, the leading owner of Nordic-based international companies and founded by the Wallenberg family in 1916. Today, EQT is a global investment organization with offices in 16 countries in Europe, North America and Asia-Pacific. Since its inception, EQT has raised approximately EUR 75 billion in commitments and has numerous investment strategies, including EQT Infrastructure.

Further details about the Offer:

•    The Offer Price of NOK 175 per share will be settled in cash. In addition, as mentioned above, Torghatten intends to distribute shares in Flyco AS to existing shareholders prior to the completion of the Offer.

• The Offer period is expected to start on 23. December 2020 in accordance with the offer document dated 22. December 2020 (the "Offer document") and is expected to last until 9. February 2021, subject to any extensions by the Offeror, once or several times, should the Offer not have been accepted by shareholders representing more than 2/3 of the issued and outstanding share capital of Torghatten (not including own shares), for a maximum offer period of 10 weeks.
• The Offeror has undertaken to complete the Offer within 20 business days of achieving acceptances from 90 % of the shares in Torghatten, provided that the other conditions for completion of the Offer are fulfilled. In such event, the Offer period will be reduced to two weeks following the announcement by the Offeror of achieving acceptances form 90% of the shares in Torghatten, unless the remainder of the Offer period is less than two weeks.
  
• The completion of the Offer will be subject to satisfaction or removal of certain conditions, including, but not limited to, (i) a minimum acceptance level of 2/3 of the issued and outstanding share capital of Torghatten, (ii) the Company's articles of association are amended with regard to purpose determination and voting rights (iii) a decision on and implementation of the planned distribution of FlyCo AS shares, and (iv) regulatory approval.

The Offer does not contain any conditions as to financing or due diligence.

The complete details of the Offer, including all terms and conditions, are included in the Offer Document, which is available on www.torghatten.no, www.eqtgroup.com and www.nordeamarkets.com/torghatten. Torghatten shareholders are encouraged to read the Offer Document as it contains important information, including the unanimous recommendation from the Board of Directors of Torghatten.

The Offeror and Torghatten have entered into a transaction agreement regarding the Offer (the “Transaction Agreement”).  Under the terms of the Transaction Agreement, subject to customary conditions, the Board of Directors of Torghatten has entered into undertakings to only amend, qualify or withdraw its recommendation of the Offer if (i) a competing offer is made, (iii) the Board of Directors of the Company considers it to be more favourable to the shareholders of Torghatten, and (iii) the Offeror has not matched the superior offer within five business days. Shareholders that have entered into agreements to sell Torghatten shares to the Offeror cannot terminate the agreement, even if the Board of Directors of Torghatten withdraws, amends or qualifies its recommendation of the Offer.

This notification does not in itself constitute an offer. The Offer is made on the basis of the formal Offer Document and can only be accepted pursuant to the terms of such document. The Offer will not be made in any jurisdiction in which the making of the Offer would not be in compliance with the laws of such jurisdiction.

Nordea Bank Abp’s Norway branch and Morgan Stanley & Co. International plc are acting as financial advisors to the Offeror. Advokatfirmaet Selmer AS is the Offeror’s legal adviser in connection with the Offer.

Arctic Securities AS is acting as financial adviser and Arntzen de Besche Advokatfirma AS is acting as legal adviser to Torghatten in connection with the Offer.

With this transaction, EQT Infrastructure V is expected to be 20 – 25 % invested (including closed and/or signed investments, announced public offers, if applicable, and less any expected syndication) based on its target fund size, and subject to customary regulatory approvals.