Blackstone to Buy 32% Stake in Stockholm Landlord Carnegie

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Blackstone Group LP agreed to buy a 32 percent stake in Swedish residential landlord D. Carnegie & Co. AB from three of the company’s biggest shareholders, a deal that would lead to a bid for the whole company.

Blackstone, through its subsidiary Vega Holdco Sarl, will acquire the shares in the Stockholm-based company for 100 Swedish kronor ($11.8) each, Blackstone said in a statement on Friday. This will give the company 40 percent of the voting rights. The sellers are Svensk Bolig Holding AB, Kvalitena AB and Frasdale Int. BV.

Once the transaction is completed, Blackstone will be obliged to bid for the rest of D. Carnegie, according to Swedish takeover rules. The landlord’s shares climbed the most since June 7.

The transaction is “an opportunity to invest in a leading, high-quality, Swedish property company with a unique business model," Blackstone said in the statement.

Cooling Market

Swedish home prices, which have been soaring due to low interest rates and a shortage of homes, are showing signs of cooling after values reached levels that are unaffordable for many buyers and the financial regulator introduced mandatory amortization requirements.

Stockholm apartment prices, which have risen 40 percent in the past three years, fell 2.7 percent in May, their biggest decline since late 2008, according to an index from Valueguard. Nationwide housing prices slid 0.6 percent, slowing the annual increase to 10.5 percent.

D. Carnegie rose as much as 5.3 percent to 104.75 kronor in Stockholm on Friday. The stock traded up 4.5 percent at 104 kronor as of 10:10 a.m. local time.

Blackstone plans to buy all of Svensk Bolig Holding’s shares, 75 percent of Kvalitena’s shares, and 45 percent of Frasdale’s shares. The firm said it will provide further information on the possible mandatory offer when it announces the completion of the deal, which is expected to be in October at the latest.

Peter Grauer, chairman of Bloomberg LP, the parent of Bloomberg News, is a non-
executive director at Blackstone.