Greeks continue to snap up Cyprus companies
Mergers and acquisitions (M&As) in Cyprus climbed 23% year-on-year during 2005 to CYP 106.39 mln compared to CYP 86.39 mln in 2004, as Greek investors continued to snap up Cypriot bargain companies.
Including the CYP 35.8 mln in related deals, whereby a Cypriot company either buys or sells a company outside Cyprus, the M&A total for the year climbs to CYP 142.2 mln, which is well above the CYP 105 mln in total deals concluded in 2002.
The M&A data, compiled by the Financial Mirror, showed that while the number of deals fell to 37 in 2005 from 42 in 2004, the cash component of the deals increased to CYP 96.7 mln or 91% of the total CYP 106.39 mln, confirming the lack of trust in equity valuations.
The Financial Mirror data shows that only CYP 9.68 mln of deals involved equity swaps, compared to CYP 68 mln in cash deals and CYP 18.69 mln of equity financed deals in 2004.
Biggest deals
By far the largest deal during 2005, which is still in progress, was the takeover bid made by 3E Cyprus, a subsidiary of the Hellenic Bottling Co. (Coca Cola), for control of Lanitis Bros. Public Co. at 17.2 cents per share for a total cash deal valued at CYP 43 mln.
The public tender document submitted by 3E, which has been approved by the CSE Council and will remain open until March 10, enjoys the backing of LB principal shareholder Vladimiros Lanitis who has pledged his 50.6% stake to 3E.
The second largest acquisition of 2005, which also involved a bid by a Greek company was the successful takeover of Chris Cash & Carry by Carrefour Marinopoulos, valued at CYP 21.6 mln in cash.
In third place was the successful takeover of Hawaii Hotels by Kania Holdings, a related group company, for CYP 8.1 mln, followed by the takeover bid interest expressed by CCC Holdings for 100% control of K&G Complex in a deal valued by the Financial Mirror at CYP 4.8 mln based on the remaining stake that CCCH and related companies already do not own.
The fifth largest cash deal involves a bid by Perlham for 93.85% of Brainstorm at 53 cents a share for a deal valued at CYP 4.3 mln. Among equity financed deals, the takeover of 51.9% of Lemissoler Shipping by SFS subsidiary White Knight valued at CYP 4.7 mln is the largest equity deal.
Related deals
In an effort to give a true representation of the M&A deals, the Financial Mirror has decided to separate M&A activity involving a Cypriot company when selling or buying a company based outside of Cyprus.
During 2005, the total value of related deals reached CYP 35.84 mln on 15 transactions with the successful takeover of Centrobanka of Belgrade by Laiki Bank Group valued at CYP 19.26 mln in cash considered as the largest related deal.
The second largest related deal involved the sale by the Cyprus Development Bank of its 8.9% stake in Forthnet of Greece to Novador of Ireland for CYP 5.5 mln in cash.
The third largest related deal refers to the sale of the remaining 4.6% held by Libra Holidays Group in Excel Airways Plc based in the UK to Air Atlanta for CYP 4.4 mln. This follows the sale of the majority stake in Excel by Libra during 2004 amounting to CYP 52 mln.
Collapsed deals
During 2005, there were at least two major deals that collapsed or were withdrawn. The largest involved a bid by Aspis Pronoia of Greece for 61% control of Universal Life from Laiki Bank and Bank of Cyprus worth CYP 16.5 mln, while the second largest collapsed deal was an attempt by Global Consolidator to sell its IT division to the subsidiary of Logicom, NetVision, for CYP 2.2 mln.
