Bank of Cyprus rejects takeover bid for Texas Fund

NICOSIA — An approach to takeover Dallas-based Lone Star funds has been rejected by Bank of Cyprus, the bid made as the bank’s shares rose 11% this year, nine years after confiscating more half of the funds in these holding accounts over 100,000 euros ($99,650.)

Bank of Cyprus has a market capitalization of 524.3 million euros ($522.46 million) according to Refinitiv and became a buyout target for the US equity fund as its value rose, the takeover attempt reported for the first time by Bloomberg news.

Lone Star, which invests in real estate, stocks, credit and other financial assets globally, said it offered 1.51 euros ($1.50) per share for the bank.

In 2011, the bank agreed to sell a portfolio of non-performing loans and some real estate to Allianz’s Pimco for around 385 million euros ($383.56) to get rid of lost proposals.

The Cypriot bank’s board said it turned down the offer because it undervalued the value of the country’s biggest lender, Lone Star, by taking three approaches. Under takeover rules, Lone Star has until 5 p.m. on Sept. 30 to announce whether it will make a formal offer.

There is no certainty that an offer will be made after the previous three proposals, the first of which took place in early May at 1.25 euros per share, the report noted, adding that the bank’s value was around $543 million.

“In addition to fundamentally undervaluing the company and its future prospects, the board believes that Lone Star’s proposal does not adequately address the complexities of completing a transaction to acquire Bank of Cyprus, given its strategic importance for Cyprus,” the lender said.

Goldman Sachs Group and HSBC Holdings advise Bank of Cyprus, according to a statement from the bank, according to the report, Lone Star – led by billionaire owner John Grayken – has invested in a number of banks.

Many private equity investors are avoiding banks, closing branches and laying off employees because customers can bank and even get mortgages on their cellphones without having to visit physical branches.

They took the money and ran away

But the sector is becoming more attractive to risk takers as interest rates rise, although account holders do not benefit, being paid a tiny amount of interest for their deposits and then loaned out at higher rates. students.

As part of the €10 billion ($9.96 billion) bailout of Cyprus in 2013 from international lenders, the Bank of Cyprus absorbed its closest competitor, the Cyprus Popular Bank, known as name of Laiki, and seized 52.5% of deposits from major account holders, taking a large chunk of the life savings of many small businesses.

The bailout, known as a bail-in for the beneficiary banks, was necessary because they became nearly insolvent due to large holdings of Greek bonds devalued by 74% and bad loans to Greek companies that did not have them. not reimbursed.

President Nicos Anastasiades has vowed to hold accountable the bankers who nearly bankrupted institutions and threatened to overthrow the economy, but failed to do so despite the damage done.

Depositors at two Cypriot banks lost billions when their savings were confiscated to protect the island’s banking system in 2013, in a process known as a bail-in. The move was a condition sought by international creditors for a 10 billion euro ($11.62 billion) bailout to the eastern Mediterranean island.

The case was put together by 51 people who lost funds and were customers of the now defunct Laiki Bank and The Bank of Cyprus, whose customers had confiscated deposits converted into shares, exchanged for shares of the bank.

A European Union and Cypriot court dismissed the lawsuits brought by the aggrieved deposits and said their losses did not show substantial harm to them and they had failed to prove it, further protecting the banks.

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