Kaupthing Bank Acquires NIBC a Dutch Merchant Bank

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Kaupthing Bank hf. ("Kaupthing") today announces that it intends to purchase the entire share capital of NIBC Holding NV ("NIBC") for EUR 2,985 million. NIBC represents an excellent strategic fit for Kaupthing in terms of geographic diversification, products and business culture.

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Kaupthing Bank hf. ("Kaupthing") today announces that it intends to purchase the entire share capital of NIBC Holding NV ("NIBC") for EUR 2,985 million. NIBC represents an excellent strategic fit for Kaupthing in terms of geographic diversification, products and business culture.

NIBC is a Dutch merchant bank focused on the mid-cap segment in western Europe with a global distribution network. The Bank has 718 full-time employees and offices in The Hague, London, Brussels, Frankfurt, New York and Singapore. NIBC, which was founded in 1945, offers innovative corporate finance, banking and investment management solutions to corporate clients, financial institutions, institutional investors and family offices. NIBC is presently owned by a consortium of shareholders led by J.C. Flowers & Co. LLC ("JCF & Co." or the "Sellers").

The expected acquisition will allow Kaupthing to further diversify and strengthen its existing operations. It will also make it one of the leading corporate and investments banks focusing on financial services to small and medium sized enterprises in Europe. The combined group will benefit from Kaupthing and NIBC's complementary product offerings and compatible business culture.

Transaction Terms and Financing:

The purchase price of EUR 2,985 million represents 12.7x NIBC's last twelve months ("LTM") net income and 1.5x NIBC's shareholders' equity as at 30 June 2007.

The purchase consideration will be structured as follows:

  • 110 million of newly issued Kaupthing shares at SEK 115.375 per share for an aggregate value of EUR 1,360 million will be issued to the Sellers in relation to completion. The Sellers will become the second largest shareholder in Kaupthing. These shares will be subject to a customary lock-up arrangement whereby all will be restricted for 12 months from closing, tapering to approximately 48 million for 24 months.
  • Cash consideration of EUR 1,625 million financed from existing cash resources, an issue of Tier 1 hybrid instruments and proceeds from an issuance of 40 million new shares (via a pre-emptive rights issue). The rights issue is expected to take place early next year.

Press conference and an analyst conference call:

Kaupthing and NIBC will hold a conference call for analysts and investors at 11.00 am (CET) today and a press conference at 14:00 (CET) today in Amsterdam. More information about Kaupthing's acquisition of NIBC is available at http://www.kaupthing.com.

For analyst and investor conference call please dial +31 (0) 20 531 58 46.

The press conference will be held at Hilton Amsterdam Schiphol Airport Hotel at Schipholboulevard 701, 1118 BN Schiphol Airport. Room: Cairo & Melbourne.

For further information, please contact:

Kaupthing Bank
Hreidar Már Sigurdsson
Chief Executive Officer
Tel: +354 444 6105

Jónas Sigurgeirsson
Chief Communications Officer
Tel: +354 444 6112

PR advisers to Kaupthing:
Anita Scott/ Tom Williams, Brunswick Group LLP
+44 207 404 5959

NIBC
Peter Bodes
Director Investor Relations & Corporate Communications NIBC
Tel: +31 70 342 56 25

About NIBC:

NIBC's predecessor De Nationale Investeringsbank was established in 1945 by the Dutch government to help finance the reconstruction of the Nether¬lands. From the beginning, the bank provided long term financing to the Benelux area through both lending and private equity investment. Until 1999, the Bank was majority owned by the Dutch government and other Dutch institutions. In 1999 the Bank was sold to ABP and PGGM, which marked the start of the evolution from a long term lending bank into a Merchant Bank focused on North West Europe. On Decem¬ber 14, 2005, NIB Capital N.V. was sold to a con¬sor¬tium of international investors, organized by J.C. Flowers & Co. LLC. In February 2006 the brand name was changed to NIBC.

Today NIBC is a merchant bank focused on the mid-cap segment in western Europe with a global distribution network. NIBC offers innovative corporate finance, risk management and investment management solutions to corporate clients, financial institutions, financial sponsors, institutional investors and family offices. NIBC has offices in The Hague, London, Brussels, Frankfurt, New York and Singapore.

NIBC's strategy is based on its intermediary role in asset origination and distribution. The strategy is executed through the integrated business model, which embodies the way in which NIBC operates, bringing specialised expertise and knowledge to targeted clients and segments.

For more information, please contact Investor Relations & Corporate Communications.
Phone: +31 (0)70 342 56 25
Web : http://www.nibc.com

About J.C. Flowers & Co LLC:

J.C. Flowers & Co. LLC, based in New York, is a private equity firm focused solely on the financial service sector. Its latest fund has over USD 7 billion in commitments from investors.

About Kaupthing Bank:

Kaupthing Bank ("Kaupthing") is a European bank offering integrated financial services to companies, institutional investors and high net worth individuals. These services include corporate banking, investment banking, capital markets services, treasury services and asset management and comprehensive wealth management for private banking clients.

The bank operates in ten countries, including all the Nordic countries, Luxembourg, Switzerland, the UK and the US. In addition, the bank operates a retail franchise in Iceland, where it is headquartered.

Based on Kaupthing's market capitalisation of EUR 9.2 billion as of 14 August 2007, the bank is currently the seven largest bank in the Nordic region. Through strong organic growth and strategic acquisitions, such as the acquisition in Denmark of FIH Erhvervsbank in 2004 and the acquisition of the UK-based bank Singer & Friedlander in 2005, Kaupthing has successfully increased both the product and geographic diversification of its operations. As of 30 June 2007 the bank has 2,970 employees and total assets of EUR 54.3 billion.

Kaupthing's shares are listed on the OMX Nordic Exchange in Iceland and Stockholm.

For further information about Kaupthing, go to http://www.kaupthing.com

This announcement and the information contained herein or in any document attached hereto or referred to herein is not for publication, distribution or release, in whole or in part, in, or into, directly or indirectly, the United States, Australia, Canada or Japan or any other jurisdiction where such publication, distribution or release would be unlawful.

This announcement is not an offer of securities for sale or a solicitation of an offer to purchase securities in the United States. The shares in Kaupthing Bank hf. ("Kaupthing") may not be offered or sold in the United States absent registration or an exemption from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"). Kaupthing's shares have not been, nor will be, registered under the Securities Act and Kaupthing does not intend to offer publicly any securities in the United States.

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Press Release - Kaupthing Bank Acquires NIBC

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Jónas Sigurgeirsson
Kaupthing Bank
+354 444 6112
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