Lone Star mulls fourth bid for BoC

1070 views
3 mins read

US private equity firm Lone Star could return with the fourth attempt at a Bank of Cyprus takeover, despite seeing three cash offers rejected by the island’s biggest lender.

In comments to international media, Lone Star officials confirmed they are considering their options regarding submitting a revised offer for the acquisition of Bank of Cyprus.

It would presumably have to be closer to a billion euros than the previous offer.

Lone Star, which invests in real estate, equity, credit, and other financial assets globally, said 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% this year, were worth €1.25 at the time of the previous offer.

On Wednesday, the BoC share was trading at 1.24 on the CSE.

Lone Star’s first offer was made at the beginning of May, with a price of €1.25 and the second at €1.38 per share.

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.

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

Bank of Cyprus rejected the investment fund’s successive proposals, considering the institution’s prospects and capabilities to materialise its strategic plan, providing strong returns for shareholders in the medium and long term.

Quoted by news site Stockwatch, a representative of Lone Star who called to comment on the reasons for the rejection of its proposals by BoC said the fund acknowledges the strategic importance of the organisation for Cyprus.

“As a global investor with a strong track record of investing in the financial sector, including Germany’s IKB Deutsche Industriebank AG and Portugal’s Novo Banco SA, Lone Star protects the strategic interests of these strategic financial institutions as well as ensuring their progress under the ownership of the fund”.

Under Irish Takeover Rules, Lone Star must, by no later than 5 pm on 30 September, either announce a firm intention to make an offer for the company or announce that it does not intend to, while the deadline could be extended.

“There is no certainty that any formal, firm offer to acquire Bank of Cyprus will be made nor as to the terms on which any such offer might be made,” Lone Star said.