Marfin Popular Bank Public Company Ltd (CPB) will not revise its offer for Bank of Cyprus and Piraeus Bank, according to Marfin CEO Andreas Vgenopoulos.
During a Conference Call held on 16 January 2007 aiming to update institutional investors and analysts on important recent developments, Vgenopoulos said that CPB has no intention to revise its offers for Bank of Cyprus and Piraeus Bank, or even offer a control premium as its approach is friendly. He also noted that CPB currently has no plans to proceed with a public offer for another Greek bank.
At the same Conference Call the Management of CPB also provided a new guidance for the company’s profitability targets for 2007, 2008 and 2009. According to Management, profit after tax is currently estimated at EUR 372 mln for 2007, EUR 480 mln for 2008 and EUR 614 mln for 2009 compared with EUR 370 mln, EUR 440 mln and EUR 510 mln before.
Management also indicated that profit after tax and after minority rights is currently estimated at EUR 360 mln for 2007, EUR 470 mln for 2008 and EUR 600 mln for 2009 in the event that the present minorities in Laiki (Hellas), Egnatia Bank, Marfin Financial Group remain. No other information regarding this issue has been disclosed.
Sharelink Securities & Financial Services analysts estimate that the improvement in profitability targets for 2008 and 2009 mainly relates to cost and revenue synergies from the recent merger of the Cyprus Popular Bank, the Egnatia Bank and the Marfin Financial Group, and the incorporation of the incremental business generated by the new branches that are planned to open in the next two years.
It should be noted that the previous Management guidance was mainly based on the addition of the expected results of the three merging companies, without incorporating any significant cost and revenue synergies.
Â
More benefits on the way
Management also indicated that the new profitability targets of CPB currently do not incorporate the 1% remuneration on the net asset value of “Marfin Investment Group” for advisory and investment banking services on behalf of CPB, as the EUR 5 billion share capital increase of “Marfin Investment Group” is still pending. Recall that the share capital increase of “Marfin Investment Group” in which CPB currently holds a 95.3% stake will take place by means of waiving of the preferential rights of the main shareholder while the shares corresponding to the waived rights will be allocated via a private placement, at the discretion of its Board of Directors, to domestic and international strategic and institutional investors. In that way the shareholding of CPB in “Marfin Investment Group” will be reduced to below 10%.
Marfin Financial Group Holdings S.A, which is a 95.3% subsidiary of CPB announced that the Board of Directors of the Company during its meeting on 10 January 2007 decided the sale of its entire shareholding in Marfin Bank A.T.E to its parent company Marfin Popular Bank Public Company Ltd for a
total consideration of approximately EUR 600 mln. Marfin Financial Group has 100% of the issued share capital of Marfin Bank. The sale is expected to take place no later than the end of February, pending a relevant decision to be taken by the Board of Directors of CPB, while the exact sale price will be
determined by a valuation report conducted by an independent audit firm which will be mutually appointed by both parties.
In addition, the Board of Directors of Marfin Financial Group decided to propose to the Ordinary General Shareholders Meeting, which will be convened by the Board of Directors following the approval of the Annual Financial Statements, the following:
1. Renaming of the Company to “Marfin Investment Group” (MIG) and the concentration of its activities into buy-out and equity investments in
2. The distribution to the shareholders, in the form of both return of capital and a dividend, of approximately EUR 850 mln.
3. A share capital increase of approximately EUR5 bln in order to fund the new activities of the Company, without the participation of Marfin Popular Bank.
