On Friday, September 16th, Manfred Wimmer , CFO of Austrian group Erste, met with the local investment funds with stakes in the SIFs to present to them the terms of the agreement to take over 24.12% in BCR from SIF Banat (SIF1.RO), SIF Transilvania (SIF2.RO), SIF Muntenia (SIF4.RO) and SIF Oltenia (SIF5.RO). SIF Moldova (SIF2.RO) has not yet decided if it wants to sell its stake in the largest bank in the system. If the deal goes through, Erste will end up holding 93% in BCR, from the current 69%.
Among the shareholders present at the meeting was the group of investment funds which in August asked the SIFs to call a General Meeting of Shareholders in order to authorize the managements to start listing proceedings for the bank.
“In the meeting, the Erste official presented the terms of the SIF agreement. There was no other information other than that already made public,” said Nicolae Pascu, president of investment management company STK Financial.
“I have not yet decided how I will vote. From what I’ve seen at this meeting, I think the offer will be accepted by the shareholders. But I think the SIFs could have gotten a higher price and a better swap ratio. A ratio of eight BCR shares for one Erste share would have been much better. The offer made by Erste is not very satisfying, but neither is it one you can easily discard,” he added.
Erste will take over 24.12% in BCR from the SIFs in a EUR435 million deal – EUR105 million in cash and EUR330 million in Erste shares. The Austrian group offered a swap ratio of around 10 BCR (old) shares for one Erste share. Another complaint of the funds is that the price offered to the SIFs by Erste for BCR shares is lower than the price offered by Erste to minority shareholders.
In order to complete the transaction, the SIFs need the approval of their shareholders.
“We don’t want to comment on this offer ahead of the General Meetings of Shareholders. All we want to say is that this offer must not be regarded as a ‘now or never’ situation. The possibility of retaining BCR shares is not that unfortunate as far as we are concerned, considering that BCR is not listed yet. It would be very important, though, that all SIFs vote on the approval of this transaction in the GM, considering the significance of this stake in their portfolios, especially since there is a legal requirement in this regard,” said Adrian Tanase, general manager of ING Investment Management Romania.
SIF Oltenia was the first SIF to call the GM. The September 22nd agenda includes authorizing the management to start proceedings to list the BCR and to start negotiations with the bank’s majority shareholder – Austria’s Erste Group Bank – on other means to capitalize on its stake. Shareholders of SIF Muntenia will vote on September 21st, the general meeting of SIF Moldova will be held on September 23rd, SIF Transilvania postponed the GM until October, while SIF Banat did not call a GM.
(English version by Daniela Stoican; Editing by Radu Bostan)