Termination of the preparation of the merger of EfTEN Real Estate Fund III AS and EfTEN Kinnisvarafond AS

On 09.08.2021, the supervisory board of the fund adopted the resolution to not go ahead with the merger of EfTEN Real Estate Fund III AS and EfTEN Kinnisvarafond AS and gave the management board of the fund and the management company the instructions for terminating the preparation of the planned merger.

Previously, the fund disclosed to the stock exchange the entry into a merger agreement between EfTEN Real Estate Fund III AS (the acquiring company) and EfTEN Kinnisvarafond AS (the company being acquired) on 15.01.2020. The objective of the merger was to merge EfTEN Kinnisvarafond AS with EfTEN Real Estate Fund III AS without initiating liquidation proceedings. Thereafter, on 26.03.2020, the fund announced the termination of the merger agreement due to the spread of COVID-19 and the declaration of an emergency situation. During the annual general meeting in spring 2021, the management board of the fund informed shareholders that is was planning to provide a new business assessment concerning the merger in Q3 2021.

Taking into consideration the long-term economic strategy of both funds, the preparation of the merger in 2020 was based on the fact that when determining the exchange ratio, it would be appropriate and relevant to proceed from the EPRA net asset value, which is calculated on the basis of similar principles for both funds.

During the preparation of the merger which continued this year, including in the circumstances serving as the basis for the merger beforehand and, upon analysing the present condition in a situation where the shares of EfTEN Real Estate Fund III AS are trading on the stock exchange with a notable premium with regard to the EPRA net asset value of the fund, it has become apparent that it is impossible to merge the funds on equal economic grounds by using the EPRA net asset value of both funds for determining the shares exchange ratio. The task of the management company is to ensure the best protection of the interests of the shareholders of both funds, and merger was never an immediate necessity for either fund; it was instead a possibility. Calculating the shares exchange ratio on the basis of the EPRA NAV is the most objective method while the protection of the best interests of the shareholders of both funds may not be completely ensured by relying on other prices.

Therefore, a resolution was adopted in order to terminate the preparations for the merger of EfTEN Real Estate Fund III AS and EfTEN Kinnisvarafond AS.

Viljar Arakas

Member of the Management Board

Phone: 655 9515

E-mail: