Sparebanken Sør (Buy, TP: NOK213.00) - Set to merge with SVEG
This morning, SOR announced its intention to merge with SVEG (acquirer), creating Norway’s largest savings bank (cNOK429m combined lending). The 1.437 ECC exchange ratio values SOR at 1.23x our 2024e BV and represents a 23% premium to yesterday’s closing price. In addition to the estimated NOK2.1bn benefit from the implementation of the new standard method, the banks guide for NOK2.0bn of capital synergies related to IRB models and NOK350m–400m of annual operating synergies. We have upgraded to BUY (HOLD) and raised our target price to NOK213 (167) to reflect the agreed exchange ratio and our SVEG target price.Sparebanken Sor. Sparebanken Sor (the Bank), formerly Sparebanken Pluss, is a Norway-based regional bank. In December 2013, the Company merged with Sparebanken Sor. It is engaged in the provision of both financial and banking products and services to individual and corporate customers. The Bank's offering includes such products and services as credit cards, loans, foreign exchange, different types of insurance, savings accounts, payment services and pension funds, as well as the NettBank online banking facility. The Bank is active through around 30 branches in the West-Agder area, the East-Agder area and Telemark. The Company's subsidiaries are Sormegleren and Sor Boligkreditt AS.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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