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Danish pension funds’ share offer prompts Nykredit IPO rethink

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Some of Denmark’s biggest pension funds have clubbed together to make an offer to buy a minority stake in the country’s main mortgage lender, according to reports.

The move has prompted Nykredit, which has a 41% share of Denmark’s mortgage lending market, to reconsider its plans to list on the stock market.

Nykredit announced that Forenet Kredit – the customer association that owns most of the company – received an offer to purchase a minority share of its holding in Nykredit.

According to local media reports, the offer has been made by a consortium of investors including Danish pension funds PFA Pension, AP Pension and PensionDanmark.

The consortium is reportedly offering to invest between DKK10bn (€1.34bn) and DKK15bn in Nykredit.

PFA Pension, AP Pension and PensionDanmark all declined to comment on these reports.

Nykredit said in its announcement to the Copenhagen Stock Exchange: “The boards of directors of Forenet Kredit and Nykredit A/S as well as the group executive board will now consider whether this offer, on balance, constitutes an attractive alternative to a stock exchange listing, including whether it ensures a satisfactory scope for raising new equity capital.”

After considering this, the board would decide whether to recommend the offer for approval by the committee of representatives of Forenet Kredit, said Nykredit. The committee would make the final decision on a potential sale of shares.

In the meantime, it said preparations for an initial public offering (IPO) would continue unchanged.

Nykredit has been working on plans to seek a stock exchange listing since February 2016, aiming for the IPO to take place before February 2018.

Forenet Kredit has said the group decided to raise more capital in order to meet its regulatory capital requirements and adapt to new and significantly higher requirements known to be on the way.

Nykredit said that “as a natural part of this process”, its group executive board had also looked at alternatives to a stock exchange listing.

The group said it had also looked into the option of selling a minority shareholding before Forenet Kredit decided to start IPO preparations.

“At the time, this was not a viable solution,” it said.

However, in the intervening period, the Nykredit Group’s financial performance had improved significantly, and investors’ demand for unlisted equity investments has grown, it said. The new purchase offer was made against this backdrop.

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  • QN-2546

    Asset class: Real Estate Equity Fund (non listed).
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    Closing date: 2019-06-28.

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