Vestjysk Bank - Low acceptance rate for the AL bid

Preliminary result of the mandatory bid is out Bid accepted for just 6.4% of the shares The bid was not recommended by the VB board 16% of remaining shareholders took the AL offer Today, Arbejdernes Landsbank (AL) announced the preliminary result of their mandatory bid for all shares in Vestjysk Bank of DKK 3.45 per share. The bid was accepted for 6.4% of the shares in Vestjysk Bank corresponding to a 16% acceptance rate for the shares not owned by AL ahead of the bid (AL had 60.7%). AL has bought 5.4% of the shares in the market alongside the mandatory bid, thus it does take its stake up to ~73%, which is enough to merge AL and Vestjysk Bank at some point. The final result is announced at July 9 at the latest.

Bid PE of 8x 2022 was not enough for most shareholders We believe the low acceptance rate of 16%, and 30% if shares bought in the market is counted, is related to AL just bidding 8x adj. PE for 2022 (recent similar transactions was 12-13x) while the bid was not recommended by the board of Vestjysk Bank. We also interpret the low acceptance rate as the customer shareholders of VB not being very keen on being taken over by AL.

Trading in the low end of our fair value range of DKK 2.7-5.5 Vestjysk Bank is trading in the low end of our fair value range including M&A of DKK 2.7-5.5. The mandatory offer has ended, so the share is back to trading at fundamentals combined with potential support from AL interest in more shares before a potential merger could lead to large potential synergies for AL on a longer-term horizon..