Kaupskil to exercise a call option on 13% stake in Arion Bank

Kaupskil ehf. a subsidiary of Kaupthing ehf. has notified the Icelandic State Financial Investments that it will exercise the call option in respect of the State’s 13% stake in Arion bank hf. in accordance with the Shareholders’ Agreement dated 3 September 2009 between Arion Bank hf., Kaupskil ehf. and the Ministry of Finance on behalf of the government of Iceland. The purchase price which is determined by the relevant provisions of the before mentioned Shareholders’ Agreement and is based on the transaction being settled on 21 February 2018 is ISK 90.087 per share, corresponding to a total purchase price of more than ISK 23.4 billion.

Arion Bank has also agreed to an offer from Kaupskil to buy back 9.5% of issued share capital in Arion Bank from Kaupskil. Settlement is expected to take place on 21 February 2018. Kaupskil’s offer is conditional upon final settlement between Kaupskil and the Icelandic government concerning Kaupskil's exercise of a call option on the State’s 13% stake in Arion Bank.

Kaupskil’s offer assumes Arion bank will pay Kaupskil ISK 90.087 per share, which is the same price that Kaupskil is paying the Icelandic government under the call option. The total purchase price is just above ISK 17.1 billion and will be deducted from the dividend payment of ISK 25 billion approved by Arion shareholders’ meeting on 12 February 2018.