Kinnevik in bid to buy up publisher Metro

Swedish investment firm Kinnevik has made an offer to buy up Metro International, a global publisher of free newspapers.

Kinnevik in bid to buy up publisher Metro

The value of the offer, excluding Kinnevik’s current stake in the company, at around 560 million kronor, or 815.7 million including debentures, places Metro’s overall value at 1.145 billion kronor.

An independent committee of the board of directors of Metro unanimously recommended that shareholders accept the offer, according to a statement from Metro issued Monday morning.

Kinnevik is offering to pay 0.90 kronor in cash for all of Metro’s A-shares, 0.94 kronor for B-shares, 0.50 kronor for all outstanding warrants issued by Metro, and 0.425 kronor per debenture for all outstanding debentures issued by Metro.

The offer, which was make public at 8am on Monday morning, amounts to a 46-47 percent premium compared to Metro’s volume-weighted average share price for the A Shares and B Shares, respectively, on the NASDAQ OMX exchange during the last three months.

Kinnevik already controls 46.6 percent of Metro’s capital and 42.2 percent of the votes in Metro.

”Kinnevik has followed Metro’s development with great interest since the company was founded more than 15 years ago to its present position as a unique and world leading player on the free newspaper market,” Mia Brunell Livfors, CEO and President of Kinnevik, said in a statement.

“We believe that Metro will continue to create value within the Kinnevik Group and we envision excellent opportunities to continued positive growth and profitability.”

“We can be good support, we have a lot of experience of investing in developing countries and a significant amount of online-investment,” she elaborated.

The Metro share price has almost halved over the course of a year, but Brunell Livfors does not thing they are being sold cheap.

“I tend not to talk about share values, that is for the market to decide,” she told news agency TT.

On Friday, trading in Metro’s shares was halted on the Stockholm exchange after the stock price shot up nearly 24 percent.

“As far as we can see it was an analysis by an analyst which was picked up by a paper and caused a strong reaction,” said Brunell Livfors, adding that as far as they can tell the surge was not caused by a leak from the company.

The Stockholm stock exchange on Monday decided to start trading the Metro share again.

At the opening of trading on Monday morning Metro’s B and A shares rose with 21 and 19 percent respectively, reaching the value offered by Kinnevik.

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Social Democrats call for Malmö underground system

Malmö’s Social Democrats have backed plans to build an underground railway in the city which could then be connected to Copenhagen through a tunnel under the Öresund straits.

Social Democrats call for Malmö underground system
The Copenhagen Metro in Örestad, near to the Öresund Straits. Photo: Johan Nilsson / TT / Kod
Malmö mayor Katrin Stjernfeldt Jammeh wants the city to begin drawing up plans for an underground railway with at least five stops: Malmö Central, Södervärn, Värnhem, Västra Hamnen and Nyhamnen. 
“We need to plan for a traffic system where we take into account being a city of half a million people,” she told the local Sydsvenskan newspaper. 
“And the traffic system needs to be able to handle more than just those who live in Malmö because we represent 50 percent of the growth in new jobs in Skåne and in addition are experiencing growing tourism.” 
Stjernfeldt Jammeh said that if her party manages to hold onto power after Sunday’s election, she aimed to push forward with the plans even before an investment decision over the Öresund Metro link. 
“There is a good reason in going underground, because we need to be economical with space on the surface,” she said. 
Sweden’s Liberal Party was the first to suggest building an underground in Malmö, with the Social Democrats instead pushing for a tram network until the plan was voted down by the centre-Right Alliance in Skåne’s regional government.