USB rallies on bid interest confirmation

The share price of Universal Bank (USB) rallied 2.9% on Friday to 70 cent per share after Universal Life Public Co. confirmed a Financial Mirror report that it had reached a deal to sell its controlling stake in USB to a German shipping group.

UL announced that it had reached a deal with Schoeller Holdings Ltd and Path Holdings Ltd for the acquisition of the majority stake in the share capital of Universal Bank Public Ltd. The agreement is subject to certain conditions, such as the satisfactory outcome of the due diligence and the approval of the Central Bank of Cyprus. It is noted that the acquisition price has not been decided yet, since it depends on the outcome of the due diligence.

The completion of the agreement entails that the buyers secure the approval of the Central Bank of Cyprus. But UL was quick to stress that the sale price will be calculated in relation to the net asset value of the Bank as at December 31, 2005, as this will be determined following a due diligence.

Pursuant to the provisions of the proposal, the Company reserves its right to terminate the agreement if the share price is lower than 74 cents and the buyers reserve their right to terminate the agreement if the price is higher than 86 cents.

It is clarified that at the current stage no decision has been taken, pursuant to Regulation 9(1)of the CSE Regulations 1997 (Public Offer for Acquisition or Purchase of Titles and Merger of Companies Listed in the CSE). “If the decision is taken, we will proceed to further announcements and we will prepare a public offer, according to the Regulations above.”

Universal Life Insurance Public Company Ltd, holds 61.06% of Universal Bank Public Ltd, and has committed to back the deal in such a way so that Schoeller Holdings Ltd and Path Holdings Ltd. acquire at least 52% of the capital of USB.