Following the failure to reach an agreement with Piraeus in Athens over the operations in Romania, JC Flowers dropped plans to buy Banca Carpatica, as well, as the two acquisitions were conditioned to each other.
JC Flowers notified Sibiu-based Banca Carpatica on the evening of December 29 that it was backing out the deal with it and its majority shareholder businessman Ilie Carabulea, turning down the invitation to contribute capital to the bank, which would have translated into a takeover. JC Flowers might return to negotiations if the bank in Sibiu is still interested.
On the other hand, since the lender really needs capital, the management, with Johan Gabriels as chief executive officer, announced it had started talks to find another investor.
“The management identified and started negotiations with another potential investor that has the resources to participate in Banca Carpatica’s capital increase via a private placement subject to certain conditions,” Johan Gabriels announced.
Banca Transilvania is said to have the biggest appetite for acquisitions on the market at the moment, and it has both the necessary resources and the expertise, since in 2015 it took over the local Volksbank operations, as well as the will to grow before the market becomes too expensive.
Raiffeisen, too, might be interested in Carpatica, considering it spent months conducting the due diligence process and talks with Ilie Carabulea a while ago.
JC Flowers’ interest in the Romanian banking market came as a surprise, given the small number of investors interested in it. JC Flowers planned to buy several banks quickly and consolidate them so as to reach 5% market share and become an acquisition target in five years.
JC Flowers would have put more than EUR550 million to EUR600 million on the table for the two lenders in Romania. The Piraeus deal should have amounted to about EUR450 million.
Market sources say JC Flowers remains interested in Romanian banks and will consider the opportunities that may arise, but its intention is to buy something with a market share close to 1% that would allow it to buy something else, too.
(English version by Loredana Fratila-Cristescu)