Piraeus seeks BOC exit

Piraeus Bank is reported to be seeking a way out of its 8.2% stake in the capital of Bank of Cyprus, acquired at a cost in excess of EUR 400 mln and which has tied up about 20% of its capital in one investment.

For Piraeus, it seems that any investment in Cyprus is turning into a fiasco. First, Piraeus tried to wrest control of the Cyprus Development Bank, but failed and exited out. At the same time, it tried to wrest control of Euroinvestment, with a limited banking license from the Central Bank, which may still end in disaster, if a court hearing scheduled for September goes the wrong way for the group.

During a conference call with analysts explaining the exceptionally good first half results, the management of Piraeus said that “we shall either seek to enter into a strategic alliance with BOC in a friendly way, or we will look to unload our stake in BOC at a time and price which we shall determine to be in the interests of shareholders and so that it does not affect the price.”

Considering that in the past, the BOC had described the Piraeus stake in the Bank as “not welcome”, analysts now expect Piraeus to seek to offload its 8.2% stake in the share capital of BOC through a placement with other institutional investors, rather than start selling the shares through the open market, which would force the price lower.

BOC shares were last trading at CYP 4.11 on the CSE.