Andreas Georghiou, the CEO and one of the major shareholders of Universal Life Insurance has won a major battle for control of the group after a court decision on Wednesday, July 27, ruling that the interim order whereby Bank of Cyprus was ordered not sell its 28% stake in UL to Aspis of Greece was permanent.
The decision is seen as yet another major setback against the Bank of Cyprus and its efforts to sell its shares to Aspis for CYP 7.3 mln in cash. The ruling also ends all hope that Aspis had of ever taking control of UL, the island’s third largest life insurance company. The decision is also a setback for Laiki Bank, which had offered its own 35% stake in UL to Aspis for CYP 9 mln.
The Nicosia Court ruled that the right of first option agreement signed between Georghiou and Bank of Cyprus in 1999 giving each other the first option to buy the other’s stake was valid.
The presiding judge rejected the declaration made by BOC that it should be allowed to proceed with the sale to Aspis and that even if it was proved that the rights of Georghiou had been violated, then it would compensate him. The judge ruled that the sale could not be allowed to proceed because the damage to Georghiou and his interests would be immeasurable.
Another argument brought by BOC against agreeing to sell the shares to
Georghiou because he did not have the backing and consent of the regulatory authorities was also rejected by the court as irrelevant to the injunction order.
The ruling effectively opens the way for the Lithuanian Snoras Bank, as well as the Columbia Ship management group as well as a third potential bidder to step forward, and file an application to the Central Bank in their bid to assume control of Universal Bank, a subsidiary of the UL Group.
The Lithuanian Snoras, which earlier was told by the Central Bank that it needed to wait until the Georghiou vs. BOC case was completed, is now free to submit a bid for USB, whereby according to reports it has offered to pay 73 cent, or book value per share, seeking 51% control. If the offer is in fact made at 70-75 cent per share, then that would be a 40% premium to the current price of USB trading on the CSE.
