THE BANK of Cyprus (BoC) has called an extraordinary shareholders meeting for July 28 to seek approval for an issue of shares as part its offer to Greece’s Emporiki Bank.
BoC is competing with France’s Credit Agricole to take over Emporiki, Greece’s fourth-largest lender by assets and the highlight of the government’s 1.65 billion euro privatisations agenda this year to pay down public debt.
BoC shareholders will be asked to approve the issue of 600 million new shares, each with a par value of £0.5. Shareholders will be asked to agree to waive their rights on the new shares.
BoC is offering 3.25 of its own shares plus six euros in cash for each Emporiki share – an offer that translates to 30.1 euros a share based on yesterday’s market price.
Credit Agricole, France’s largest retail bank, is offering 23.5 euros a share, all in cash. Both tender offers have set a minimum acceptance threshold of 40 per cent.
Greece’s securities regulator yesterday approved Credit Agricole’s tender offer to take over Emporiki, the highlight of the government’s privatisations agenda this year designed to pay down debt.
“The Capital Market Commission has approved (Credit Agricole’s) tender offer prospectus,” a commission official who requested anonymity said yesterday.
Emporiki shares were up 1.2 percent at 27.42 euros in light volume yesterday. With a current market value of 3.6 billion euros, the bank trades at 21.8 times forecast 2006 earnings, a premium to other Greek banks where the average multiple is 15.
BoC shares also soared yesterday on the Cyprus Stock Exchange, increasing 13 cents, or 3.12 per cent to £4.30, with 60 per cent of the total volume traded for a second day.
In a statement yesterday the bank said that during the July 28 extraordinary meeting resolutions will be proposed for approval to increase the authorised share capital of the Company be increased from £300 million to £600 million by the creation of 600.000.000 additional ordinary shares of nominal value £0.50 each.
“The validity of this resolution is subject to the approval of the special resolution below by the Extraordinary General Meeting and the acceptance by the shareholders of Emporiki Bank of Greece S.A. of the Public Offer of the Company for the acquisition of at least 40 per cent of the shares of Emporiki Bank of Greece S.A,” BoC said.
A special resolution will also be proposed saying that for the purpose of acquiring up to 100 per cent of the shares of Emporiki, the shares of the Company to be issued as part of the offer, would not be offered to the existing shareholders of the Company but to the shareholders of Emporiki.
“The new shares shall rank pari passu for all purposes with the existing fully paid up shares of the Company,” the bank said.
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