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Regulator gives go-ahead to Eurobank-HB takeover

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The competition commission has given the go-ahead to Eurobank’s bid to take control of Hellenic Bank and, in effect, to become the largest lender on the island, with the next approvals pending from the Cyprus and European central banks, and the insurance watchdog.

The Commission for the Protection of Competition (C.P.C.) said it approved, by majority vote, “the act of concentration for the acquisition of the share capital of Hellenic Bank Public Company Limited by Eurobank S.A.”

The CPC said its board decision of February 2, considered the takeover offer as “compatible with the operation of market competition.”

The Cyprus arm of Eurobank SA currently controls a 29.2% share and will, after the approval of its takeover, increase its control to 55.3%.

The CPC was first notified of Eurobank’s intentions on September 14, 2023, soon after it signed consecutive agreements with strategic shareholders Poppy S.à r.l (Pimco), Senvest Management LLC and Wargaming Group for the acquisition of their combined 26% stake.

The CPC said is reviewed the initial deal on October 30 and, during a public consultation process, whereby it raised and published some concerns, the relevant assurances from all stakeholders by January 16, 2024.

Interest since 2021

The subsidiary of Greek Eurobank SA and the island’s third largest banking institution joined Hellenic’s shareholders in June 2021, when it bought the 12.6% holding from fund managers Third Point Hellenic Recovery Fund.

Later, it made a deal with Wargaming for their 13.4% share of the bank’s capital and Eurobank became Hellenic’s major shareholder after acquiring another 3.2%, essentially buying out Senvest Management LLC for €16.74 mln.

At the end of August, Wargaming announced its decision to sell its remaining stake of 6.8% in Hellenic to Eurobank in a deal valued at €65.9 mln, or €2.35 per share.

Following the approval of the deals, Eurobank will proceed to a mandatory public offer to the shareholders of Hellenic, including investment company Dimitra and Logicom, which collectively hold around 25%.

Around 15% of the Hellenic’s equity capital is owned by about 25,000 shareholders, while banking trade union ETYK’s providence and welfare funds own 6.44% of HB’s shares.