Senvest becomes major shareholder in BoC

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Weeks after offloading 3.2% of its 4.5% holding in Hellenic Bank, fund manager Senvest Group has increased its participation in the island’s largest lender, Bank of Cyprus.

According to an announcement sent by Senvest to the Irish regulatory authorities, the investment fund has increased its share in BoC’s capital from 7.79% to 8.06%.

The latest increase derived from purchases of shares on the stock market over the past ten days.

The 8.06% currently held by Senvest Group in BoC corresponds to approximately 36 million shares, making Senvest the third biggest shareholder.

BoC’s largest shareholder is Panama-based Lamesa Holding, owned by Russian businessman Victor Vekselberg.

Vekselberg is included in the list of Russian business people sanctioned following Russia’s invasion of Ukraine in February 2022, meaning that Lamesa Holding does not have voting rights.

This makes Senvest the second largest shareholder with voting rights, behind CarVal Investors, which holds 8.57% of the bank’s capital, and Caius Capital holds 7.96%.

Senvest increased its capital from 7.11% to 7.79% amid takeover efforts by US private equity fund Lone Star.

Beginning in August and within two months, the American fund submitted three proposals for acquiring the Bank of Cyprus, which were unanimously rejected by the board.

Lone Star, which invests in real estate, equity, credit, and other financial assets globally, said it offered €1.51 per share for BoC, meaning the takeover would cost €727.25 mln.

Shares in the bank were worth €1.25 at the time of the previous offer.

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 €584.5 mln.

“The prospects of profitability, growth and stability of the Bank of Cyprus are factors that contributed to us proceeding to increase the share capital,” Stefanos Hailis, Cyprus representative for Senvest Management LLC, told news site Stockwatch.

“This is an attractive position as we recognise the reduction of risks on Bank of Cyprus’ balance sheets, brought on by the reduction of NPLs, operational and labour costs”.

Senvest, on 30 December 2022, sold 3.2% of its overall share of Hellenic to Eurobank, the island’s second-largest lender, for €16.74 mln. The fund maintains 1.3% of HB’s capital.

The deal with Eurobank saw the latter come close to owning a third of Hellenic, as it added to a deal with Wargaming to acquire its 13.4% share.

Once the Cyprus Securities and Exchange Committee approves the deal with Wargaming, Eurobank will own 29.2% of Hellenic’s capital.

If the holding reaches 30%, Eurobank is legally bound to make a public offer for Hellenic.