Invalda INVL and Šiaulių Bankas merge their retail businesses

On 22 November 2022 Šiaulių Bankas and Invalda INVL signed an agreement on the merger of part of the retail businesses. The Management Board of Invalda INVL approved the agreement on 22 November 2022.

After the closing of the transaction, the Šiaulių Bankas group, in addition to the financial services it already offers, will manage second-and third-pillar pension funds and mutual funds in Lithuania and will provide life insurance services throughout the Baltic countries. It is planned for the bank’s subsidiary SB Draudimas to take over INVL’s life insurance business in Lithuania, Latvia and Estonia, while the pension and mutual funds business in Lithuania will be carried out through a newly established company within the Šiaulių Bankas group.

Once the deal is completed, Invalda INVL will obtain 62,270,383 units of Šiaulių Bankas shares, which will constitute 9.39 % of the authorized share capital of Šiaulių Bankas. To finalise the transaction, Šiaulių Bankas will issue a targeted share issue for purchase by the Invalda INVL group, at the price of EUR 0.645 per share (a premium of 5% over the bank’s share price on the Nasdaq Vilnius exchange as of 22 November 2022).

The equity value of the transaction is EUR 40.2 million. As announced in the Interim information for 6 months of 2022, the carrying value of the entire asset management and life insurance business, excluding historical investments in subsidiaries and investments in products managed by INVL, on 30 June  2022 was equal to EUR 7.5 million. This carrying value is determined in accordance with international accounting standards using the equity method and does not reflect the fair value, which is significantly higher, as it is revealed by the transaction value.

“The merger of these retail businesses will deliver greater value for clients, employees and investors. INVL’s existing clients will continue to receive professional saving, investment and life insurance solutions as well as having additional access to the bank’s wider suite of services. The combined team’s shared aim is for the bank's services to be the best choice available for customers. Employees, for their part, will have increased opportunities to develop and realise their potential. A bank that is actively growing, expanding its portfolio of services, maintaining high profitability and is attentive to its share value should become even more attractive to institutional and private investors.

This deal benefits Invalda INVL shareholder’s both due to anticipated faster growth in the value of the company's stake in Šiaulių Bankas and the disclosure of fair value of the INVL' retail business included in the process of the transaction. As required by international accounting standards, Invalda INVL’s entire core investment management business is accounted for using the equity method which does not reflect its fair value, which is significantly higher.” – Darius Šulnis, President of Invalda INVL, says.

The transaction will be completed after it is approved by the shareholders meetings of Šiaulių Bankas and Invalda INVL respectively and after all the required regulatory permissions are obtained. It is expected that this will happen at the end of 2023.

After the completion of this and other announced planned share acquisitions, the Invalda INVL group’s equity stake in Šiaulių Bankas will increase from the current 8% holding to approximately 20%.

Following completion of the transaction, the Invalda INVL group will remain active in the management of private equity and alternative investments, providing Family Office services as well as managing second-and third-pillar pension funds in Latvia.

In order to disclose the information in as much detail as possible, we additionally attach the slides presenting the transaction and the public announcement.

Person authorised to provide additional information:

Darius Šulnis

President of Invalda INVL

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