Lone Star not keen on fourth bash at BoC take over

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Private equity firm Lone Star has yet to reveal whether it plans to increase its €727 mln bid to buy Bank of Cyprus after having a cash proposal rejected by the biggest lender’s board for the third time.

“It is not certain whether any offer will be made, nor as to the terms,” Lone Star said in a statement to the London Stock Exchange at the end of last week.

U.S.-based Lone Star, which invests in real estate, equity, credit, and other financial assets globally, said on Friday it offered €1.51 ($1.52) per share for the bank, meaning the takeover would cost €727.25 mln

Shares in the bank, which are up about 12% so far this year, closed at around €1.25 on Monday, up from €1.14 on Thursday.

Bank of Cyprus currently has a market cap of €524.3 mln ($526.66 mln), according to financial market data provider Refinitiv, owned by the London Stock Exchange.

Lone Star has until 30 September to file a new offer, according to Irish regulations, as Bank of Cyprus Holdings Plc was incorporated in Ireland in 2016 for the purpose of listing on the London Stock Exchange.

Meanwhile, the Bank of Cyprus Tuesday, in a notice in local newspapers, strongly urged its shareholders not to take any action.

Last Friday, the Bank of Cyprus, in its announcement to the supervisory authorities, partially explained the reasons for rejecting Lone Star’s proposals, stressing the board looks forward to its ability and the group’s prospects to implement its strategic goals, providing strong returns for shareholders in the medium and long term.

News site Stockwatch quoted officials confirming the government would not want a buyout of the country’s largest domestic banking institution by an investment fund.

In addition, the Ministry of Finance is preparing to submit a bill to the Parliament on the establishment of a framework for the control of foreign direct investments.

This law, according to Stockwatch, incorporates into national law the relevant regulation issued by the EU concerning the control of foreign direct investments within member states.

The majority of EU member states has implemented this law since 2019.

It gives governments the right to assess whether a direct foreign investment is likely to affect the security or public order of the Republic of Cyprus and whether the company in which the direct foreign investment is planned operates in sensitive sectors, including financial services and systemic credit institutions.