Deal awaits CB approval
The Russian controlled, but Lithuania domiciled Snoras Bank has submitted a letter seeking 50.1% control of the CSE-listed Universal Bank, but needs to secure the permission from the Central Bank to proceed with the deal.
The Board of Directors of Universal Life decided to refer the bank to the Central Bank of Cyprus in order to obtain certain approvals before proceeding to the relevant evaluation.
Informed sources told the Financial Mirror that the bid interest submitted by Snoras is based on the net book value of USB, which according to the latest available figures amounted to 76 cents per share, which is at a 40% premium compared to the current price of USB, trading on the CSE.
Based on the outstanding 15.1 mln shares in circulation, a deal priced at 76 cents would value USB at CYP 11.5 mln, with Snoras needing to pay about CYP 5.75 mln in order to wrest control of the Bank.
The Central Bank however needs to give its consent since according to local legislation, it has the power to scrutinise and deny or accept majority shareholder purchases in banks exceeding 10%.
UL/ASPIS
The deal is also directly related to the efforts of the CEO of Universal Life Insurance Co, Andreas Georghiou, who is attempting to purchase the 28% of the shares of UL held by Bank of Cyprus for CYP 7.3 mln in cash.
Georghiou announced last week his intention to exercise an option giving him first right to acquire the UL shares from BOC, which in the process torpedoed the deal under which BOC and Laiki Bank, holding 35% stake in UL, would tender in their combined shares to Aspis of Greece.
BOC had given A. Georghiou until yesterday to come up with the CYP 7.3 mln in cash and present the real and beneficial buyers of its stake in UL, otherwise, threatening to give its shares to Aspis, which has offered to pay CYP 1.99 per UL share in cash, provided that it acquires the stakes of both BOC and Laiki, giving it majority control of UL.
Laiki holds 35% of the shares of Universal Life Insurance, which in turn holds the majority shares of Universal Bank.
In the event that BOC and Georghiou fail to reach a mutually acceptable deal, and if BOC attempts to sell its stake in UL to Aspis, then Georghiou is most likely to sue the Bank and drag the issue before the courts.
Snoras Bank is one of the recently established banks in Lithuania, set up four years ago and claims that its the second best rated bank there, citing local newspaper surveys.
The Russian Konversbank and its subsidiary, Luxembourg-based Incorion Investment Holding Company, were last year granted permission to raise their ownership stake in Snoras, assuming management control as well.
The authorised capital of Snoras totaled 137 mln litas ($46 mln), and after the stock purchase, Konversbank lifted its combined stake to 57.6% in the Lithuanian commercial bank.
The other major stakeholders are Nuntel Holding LLC with 9.9%, Hoffman Development LLC with 9.9%, and Axcol Properties Limited with 9.9%.
Snoras reported a profit of 10.3 mln litas last year.
