Nordea sale – Q&A

Sampo announced on 10 November 2020 that it has reduced its ownership in Nordea in line with its strategy. Sampo sold 162 million Nordea shares in an accelerated bookbuild offering to institutional investors.

The transaction price was EUR 7.25 per share, resulting in gross proceeds of approximately EUR 1,174 million. Sampo will incur an accounting loss of EUR 222 million from the transaction for the last quarter of 2020.

After the transaction, Sampo holds 642,924,782 Nordea shares, corresponding to 15.9 per cent of all shares and voting rights in Nordea. Sampo has entered into a lock-up undertaking, under which it has, subject to certain exceptions, agreed not to sell any Nordea shares for a period ending at 9 May 2021.

Sale release
Result of the sale

Questions and answers

Why did you decide to reduce your ownership in Nordea?

Sampo’s strategy is to focus on its core competence area, P&C insurance, as this is where we think we can add most shareholder value. The Hastings acquisition offer was the first step towards that direction and reducing ownership in Nordea is another. The transaction adjusts the balance between P&C insurance operations and our other assets.

Have you lost your faith in Nordea’s turnaround process?

No, we definitely have not. Nordea remains committed to achieve its financial targets for 2022 and has shown very positive signs of progress during the last couple of quarters. With 15.9 per cent ownership, Sampo still remains the largest shareholder of Nordea and we are confident that Nordea will meet its targets. The sale reflects our strategic ambitions towards P&C insurance.

Will you continue to sell Nordea after the lock-up period ends?

We review our holdings continuously and will align these with our P&C focused strategy as and when we think this makes sense for the group. This process is driven by how we see each asset contributing to the group, its financial performance and overall impact on shareholder value rather than practical factors such as the lock-up.

What are you going to do with the proceeds?

Part of the proceeds will be used to reduce Sampo’s leverage and the rest will further strengthen Sampo’s liquidity position and ability to respond to future opportunities.

The market is full of cheap debt capital, why are you worried about your leverage?

We are not worried, but after the Hastings offer, the leverage rose a bit too high for our taste.

Are there any M&A opportunities in sight?

We always keep our eyes open for opportunities, but at the moment we are not in an acquisition mode as we focus on closing the Hastings deal.

Does the sale affect Sampo’s dividend policy?

It does not. The accounting loss from the transaction will be treated as an extraordinary item in calculating the dividend paid for 2020 and it will therefore not impact the dividend. Sampo’s dividend policy, adopted on 6 February 2020, is to pay total annual dividends of at least 70 per cent of Group’s net profit (excluding extraordinary items) and that share buy-backs can be used to complement the cash dividend.

Nordea will still be an associate of Sampo. At what point the position must be changed?

The position as an associated company is based on Sampo’s influence in Nordea. Sampo is still the largest shareholder of Nordea by a margin and Torbjörn is the Chairman of the Board there. The position is something that must be discussed with the FSA and auditors. There is no exact percentage for that.

Are you going to exit your financial and fintech assets as well? (Saxo Bank, Nets, Nordax, Bank Norwegian and Enento Group)

These are financial investments for Sampo. Thus, it’s likely that we will eventually divest these investments, but we have no need to make any sudden moves. These are all different investment cases at different stages of development, and all of them are generally performing well at the moment.