Andreas Georghiou, CEO of Universal Life Group, has thwarted the second largest takeover deal of the year by exercising an option giving him first right on the Universal Life shares that the Bank of Cyprus wished to sell to Aspis Pronia of Greece.
“My decision was taken to protect the independence of the company and to protect the interests of all shareholders, the staff and clients of Universal Life,” Georghiou said in a written statement.
Two weeks ago, Bank of Cyprus Pcl (BOC) and Laiki Bank Pcl (CPB) jointly announced that they had reached a deal with Aspis Pronia, the Greek insurance company, for the sale of their stake in the share capital of Universal Life Insurance Public Co.
The total consideration price was CYP 16.5 mln or CYP 1.99 per share, which if successful would have placed the bid as the second largest takeover deal of the year, behind the takeover attempt by another Greek owned concern, Carrefour Marinopoulos to buy 100% of Chris Cash & Carry for CYP 21.6 mln in cash and take the company private.
The agreement between Aspis and the two largest banks was subject to satisfying a number of criteria, including: the payment of an upfront deposit, the waiving of the pre-emption right of the Georghiou Family and the granting of the necessary approvals by the Central Bank and the Superintendent of Insurance.
Laiki Bank, holding 35% of the share capital of UL, would receive CYP 9.2 mln in cash while BOC, holding a 28% stake in UL, would receive a total of CYP 7.3 mln in cash.
By exercising his first option to purchase the UL shares from BOC, Georghiou has essentially killed off the Aspis deal, since the Greek insurer had stated from the start that it was only interested in a majority stake, but wanted to keep Georghiou as CEO.
BOC sources told the Financial Mirror that they “were not in a position to make a statement” regarding their intentions, while Laiki sources also refrained from stating whether they may challenge Georghiou.
More complications against the intentions of Georghiou may emerge in the event that the Central Bank decides to block his move to become the biggest shareholder of Universal Bank, which is majority owned by Universal Life.
The issue is indeed complicated considering that as yet, Georghiou has not yet revealed who is the source of financing to pay the CYP 7.3 mln amount to BOC. Georghiou is reported to have told a daily newspaper that he has received broad support from many sources and contrary to speculation, insists that the Photiades Group with whom he has family interests is not behind the move.
The Central Bank however, has the right to scrutinise any share exchanges in a local bank exceeding 10% and if it wishes so, it can block the deal.
