Statement by the independent committee of D. Carnegie & Co AB (publ) in view of Blackstone’s mandatory tender offer

The independent committee of D. Carnegie & Co AB (publ) (“D. Carnegie & Co” or
the “Company”) unanimously recommends the shareholders not to accept
Blackstone’s mandatory tender offer.
Background
This statement is made by the independent committee of D. Carnegie & Co pursuant
to section II.19 of the rules concerning public takeover offers on the stock
market adopted by Nasdaq Stockholm (the “Takeover Rules”).

Vega Holdco Sarl (”Vega Holdco”), an entity wholly owned by real estate funds
advised by affiliates of the Blackstone Group L.P. (together with its affiliates
“Blackstone”) has today on 17 October announced a mandatory tender offer in cash
to the shareholders and warrant holders in D. Carnegie & Co to transfer all of
their shares and warrants in D. Carnegie & Co to Vega Holdco at a price of SEK
100.00 per share, regardless of share class, SEK 51.10 per warrant of series
2014/2017, SEK 30.30 per warrant of series 2015/2018, and SEK 13.70 per warrant
of series 2016/2019 (the “Mandatory Offer”). Vega Holdco has declared that it
holds 32 per cent of the shares and 40 per cent of the votes in the Company and
controls, through agreement with Kvalitena AB and Frasdale Int. BV, in total 53
per cent of the votes, and states that the Mandatory Offer is launched in
accordance with the specific provisions regarding mandatory bids in the Stock
Market Takeover Bids Act (2006:451).

The price per share in the Mandatory Offer corresponds to the price per share
paid by Vega Holdco when acquiring shares from the three major shareholders in
accordance with the agreements entered into on 15 July 2016. The total value of
the Mandatory Offer amounts to approximately SEK 5.4 billion, based on the
current number of outstanding shares and warrants in D. Carnegie & Co not
directly or indirectly held by Vega Holdco. According to the preliminary
timetable included in the press release through which the Mandatory Offer was
announced, the offer document is expected to be made public on 19 October 2016,
the acceptance period is expected to commence on 20 October 2016 and end on 18
November 2016 and settlement is expected to commence around 2 December 2016. For
further information about the Mandatory Offer, please refer to Vega Holdco’s
offer press release, which was made public today on 17 October.

As announced by the Company on 15 July 2016, the board has within itself
appointed an independent committee consisting of the board members Mats Höglund
and Eva Redhe (the ”Committee”), to represent the Company in connection with a
mandatory tender offer and make a statement regarding such offer.

The board member Knut Pousette and the previous board members Ranny Davidoff and
Terje Nesbakken are representatives of the major shareholders who have entered
into agreements with Vega Holdco regarding transfer of shares and exercise of
voting rights, and have therefore due to conflict of interest not participated
in the board’s considerations and resolutions in relation to the Mandatory
Offer. The two new board members appointed by the extraordinary general meeting
of the Company on 14 October 2016, James Seppala and Svein Erik Lilleland, are
employed by Blackstone and a company affiliated with Blackstone, respectively,
and have therefore due to conflict of interest not participated in the board’s
considerations and resolutions in relation to the Mandatory Offer either. Since
James Seppala, who is employed by Blackstone, is participating in the Mandatory
Offer, the Company is, according to section III.3 of the Takeover Rules, obliged
to obtain and publish a fairness opinion from an independent expert regarding
the Mandatory Offer. As part of the Committee’s evaluation of the Mandatory
Offer, the Committee has engaged Handelsbanken to provide such fairness opinion.

The Committee has allowed Blackstone to carry out a limited due diligence
investigation in connection with the preparations of the Mandatory Offer and
Blackstone has in connection therewith also met certain senior executives of D.
Carnegie & Co, among them the CEO and the CFO of the Company. In addition,
Blackstone received certain information from the Company that was included in D.
Carnegie & Co’s financial report for the second quarter of 2016 ahead of the
announcement of the report on 15 July 2016. During the due diligence
investigation, no information that has not previously been published and that
could reasonably be expected to affect the price of the Company’s shares has
been provided.

As part of the Committee’s assessment of the Mandatory Offer, the Committee has
also engaged SEB as financial advisor and Advokatfirman Vinge as legal advisor.

The offer’s impact on employees etc.
Under the Takover Rules, the Committee must, on the basis of Vega Holdco’s
statements in its press release regarding the Mandatory Offer, present its
opinion regarding the impact that the implementation of the Mandatory Offer may
have on D. Carnegie & Co, particularly in terms of employment, and its opinion
regarding Blackstone’s strategic plans for D. Carnegie & Co and the effects it
is anticipated that such plans will have on employment and on the communities in
which the company conducts its business.

The Committee notes that in the press release, Vega Holdco states that
Blackstone does not foresee any material changes with regard to D. Carnegie &
Co’s operational sites and its management and employees, including their terms
of employment.

The Committee assumes that this description is correct and has in relevant
respects no reason to take a different view.

The Committee’s recommendation
The Committee’s statement is based on an overall assessment of a number of
factors that the Committee has considered relevant for the evaluation of the
Mandatory Offer. These factors include, but are not limited to, the Company’s
present position, the expected future development of the Company and
possibilities and risks related thereto. The Committee has also evaluated
alternative structures.

The Committee notes that the price per share offered by Vega Holdco corresponds
to a discount of approximately 6.0 per cent compared to the volume weighted
average share price of SEK 106.43 for the Company’s B share on Nasdaq Stockholm
during the last three months up to and including 14 October 2016, i.e. the last
trading day prior to the announcement of the Mandatory Offer. Compared to the
closing price of SEK 102.50 per share for the Company’s B share on Nasdaq
Stockholm on 14 October 2016, the Mandatory Offer corresponds to a discount of
approximately 2.4 per cent. The Committee further notes that the price per share
in the Mandatory Offer corresponds to the price per share paid by Vega Holdco in
the acquisitions of the three major shareholders’ shares in accordance with the
agreements entered into on 15 July 2016.

The assessment is also based on Handelsbanken’s fairness opinion as to the
fairness from a financial perspective of the Mandatory Offer for the
shareholders in D. Carnegie & Co. According to the fairness opinion, attached to
this press release, Handelsbanken’s opinion is that the Mandatory Offer, subject
to the conditions and assumptions stated in the opinion, is not considered fair
from a financial perspective for the shareholders in D. Carnegie & Co.

In light of the above, and on the basis of the current state of the market and
interest rate level, the Committee unanimously recommends the shareholders of D.
Carnegie & Co not to accept the Mandatory Offer. The Committee’s assessment is,
however, that it could be positive for the Company that a well-known real estate
investor such as Blackstone becomes a new principal owner and can contribute to
the Company’s continued development.

This statement shall in all respects be governed by and construed in accordance
with Swedish law. Any dispute arising out of or in connection with this
statement shall be settled exclusively by Swedish courts.

Stockholm, 17 October 2016
D. Carnegie & Co AB (publ)
The independent committee

For further information, please contact
Mats Höglund, board member and chairman of the independent committee, mobile +46
705 93 24 63

This information is information that D. Carnegie & Co AB (publ) is obliged to
make public pursuant to the EU Market Abuse Regulation and the Takeover Rules.
The information was submitted for publication, through the agency of the contact
person set out above, on 17 October 2016, 7:45 a.m. CEST.
About D. Carnegie & Co

D. Carnegie & Co is a property company focusing on residential properties in the
Greater Stockholm region and other growth areas. The company’s business concept
is to own property portfolios slated for a gradual renovation of apartments in
conjunction with the natural turnover of tenants. This can take place quickly
and cost-efficiently thanks to extensive experience from the Bosystem renovation
method which, among other things, means that no evacuation needs to take place.
In addition to this, the company creates value through the development of
building rights in existing portfolios. The market value of the company’s
properties amounted to SEK15,205 million on 30 June 2016. The total rental value
amounted to SEK 1,349 million annually on 30 June 2016. The economic occupancy
rate is high – vacancies are virtually non-existent. D. Carnegie & Co is listed
on Nasdaq Stockholm.