MFS in first share swap with ASE listed company

MFS Holdings may become the first Cypriot public company to engage in a share swap with a Greek listed company if the plans announced by both companies proceed as planned.

Keramia Allatini A.V.E.T.E., a Greek company established since 1888 and listed on the Athens Stock Exchange since 1964, announced on Monday that it intends to acquire from 51% to 100% of the share capital of MFS through a share swap.

People close to the deal estimate that the share swap ratio could be 8-9 Keramia Allatini shares for every 10 MFS shares, or even 1:1 depending on the net asset valuations and the due diligence audits.

MFS majority shareholder Lambros Christophi who together with associates is reported to be controlling just above 50% of the capital of MFS is supporting the deal.

Once concluded, Christophi will gain a seat on the Keramia Allatini Board and join its Management team, which in recent years has been hammered by the illness of its major shareholder, Costas Kotsias.

Keramia Allatini is reported to be active in the production of ceramic tiles and other construction related products, but also boasts huge real estate holdings in Greece, while MFS controls the share capital of the Cyprus life insurance company, Liberty Life, as well as Galaxias Insurance, active in the Greek general insurance business market.

The deal is subject to the approval by the Superintendent of Insurance of Cyprus and Greek insurance regulators, but the fact that Keramia Allatini has never been involved in the insurance sector may be a blessing paving for approval of the equity swap.

Meanwhile, a glitch in the Memorandum and Articles of Association of Keramia Allatini is seen blocking the deal until it is changed, which is why the company has called for an EGM to amend its Articles paving the way for the merger to proceed. This is seen delaying the conclusion of the deal by 6 weeks until the end of April 2006.