Erste Bank, which owns 69.4% in BCR, made an offer to the five SIFs to buy their stakes in Romania’s largest bank.
In 2006 the Austrian bank paid EUR3.75 billion for 61.88% in the bank, which it bought from the Romanian government, the European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC, World Bank’s investment arm). BCR’s sale was one of the most profitable privatizations for the Romanian government and one of the most transparent.
At that time, the five SIFs – Banat-Crisana, Moldova, Transilvania, Muntenia and Oltenia – remained shareholders of the bank, on the condition that Erste lists BCR on the Bucharest Stock Exchange, so as to sell their 30% stakes. But the Austrian group has no intention of listing the bank in Bucharest, instead making an offer to the SIFs to buy their stakes.
“All five SIFs received a concrete offer from Erste for their stakes in BCR. The offer is the same for all five SIFs. We have signed a non-disclosure agreement and I cannot say anything until all signatures are there. I think this matter will be resolved within a reasonable period of time, a month or two at the most,” said Ioan Cuzman, chairman of SIF Banat-Crisana (SIF1.RO), which holds 6% in BCR.
Andreas Treichl, Erste Group’s chief executive, said Friday that BCR listing would make no sense, adding that his duty is to persuade all parties involved that “the listing is not necessary.” Treichl’s statements put pressure on the five SIFs to quickly decide on the 30.1% stake they hold together in BCR.
Erste’s CEO affirmations were followed by a bank statement on Tuesday, saying the group awaited the SIFs’ decision in the wake of talks on alternatives to BCR listing and that it would be ready to “rapidly make any necessary decision”.
Though the SIFs have all the leverage they need to bring BCR on the bourse, they do not have a joint strategy and have not agreed on whether they should sell their BCR shares together to Erste or request the bank’s listing.
Talks with Erste on the bank’s floatation have lasted for more than a year, and among the five SIFs, SIF Moldova (SIF2.RO) has stood out as one of the most fervent supporters of BCR’s listing.
According to some capital market sources, SIF Banat-Crisana, together with SIF Transilvania (SIF3.RO) and SIF Muntenia (SIF4.RO) would agree to sell the BCR shares to Erste, while SIF Moldova and SIF Oltenia (SIF5.RO) are still for the bank’s listing. However, the SIFs must rapidly make a decision as the deadline by which they agreed with Erste to delay floatation expires in October. If the deadline is not met and the SIFs do not sign a new agreement with Erste on listing delay, then the Austrian group is forced to start floatation procedures.
BRD, the second-largest bank on the Romanian market with assets of EUR11.3 billion and a net profit of EUR119 million in 2010, has a stock exchange value of EUR2.2 billion, being valued by investors at around 20 times its net profit. By a similar measure, BCR, with EUR16.1 billion in assets and a net profit of EUR110 million in 2010, but with a potential to generate 50% higher profit thanks to its larger assets, could be valued at EUR3.3 billion. So, the stakes of the five SIFs of 30% in the BCR could be worth around EUR1 billion.
In Poland, the government is preparing to sell 10% of the largest bank PKO on the Stock Exchange. For 10% in PKO, estimates say the Polish government could collect over $2 billion (EUR1.4 billion).
(English version by Catalina Apostoiu and Daniela Stoican, Editing by Loredana Fratila-Cristescu)