A record number of Laiki Bank Pcl shareholders packed the Hilton on Tuesday cheering board member and Marfin Vice-Chairman Andreas Vgenopoulos to press ahead with ambitious plans to create one of the largest financial institutions of the region through the triple merger between Laiki, Marfin and Egnatia.
Though the extraordinary general meeting was expected to give Vgenopoulos the green light to proceed with the merger, those present agreed to postpone their decision until next week to allow time for shareholders to get a clearer picture of the whole deal.
However, the new board member took up the opportunity of a record crowd to lash out at the few disgruntled shareholders who were hell-bent on blocking the deal, including the bitter ousted chairman Kikis Lazarides who has not lost an opportunity to blast the deal and its architect.
Vgenopoulos told an enthusiastic crowd that Lazarides should come forward with any document he may have that alleges that Vgenopoulos offered bribes, instead of waving it in the air from far away, as the former Laiki chief exec has done in front of television cameras for the past few days.
The Laiki EGM was called to ratify the issue of up to 465 mln new shares to fund the takeover of Marfin Financial Group, Egnatia Bank and a minority shareholding of Laiki Hellas not controlled by the Group. The EGM was also expected to decide to change the Group’s name to Marfin Popular Bank.
A record 1200 shareholders representing 52.35% of the total capital of Laiki Bank attended the meeting, which approved a proposal by Andreas Vgenopoulos to postpone the EGM for a week in order to allow more time for shareholders to study the proposals, the recommendation reports and the opinion of the independent advisors.
The EGM will be held next Tuesday, October 31, at 5pm at the International Conference Centre in
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Data rooms
The data room in
Laiki CEO Christos Stylianides said the data rooms will provide the financial statements of Laiki, Marfin and Egnatia for the years 2004, 2005 and the first half of 2006. Other information will include future plans, prospects, forecasts, board action on pricing and how the share swap ratios were calculated, as well as the fairness opinion expressed by Deutsche Bank, KBW and recent analyses by UBS and CSFB on the share price of Laiki and Marfin.
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Prospectus
Vgenopoulos told shareholders that the Laiki board did not circulate a prospectus because the deal follows Greek Capital Markets Commission rules according to which a summary of the public offer needs to be circulated prior to shareholder approval. The same rules say that any other document containing information on the deal will need to be incorporated in the public offer document.
“We are now able to circulate all the documents because this is done during the EGM, which is considered as a private affair and is not public information, which is why access to the data rooms will only be allowed to Laiki shareholders,” he said.
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Due Dilligence
Laiki CEO Christos Stylianides told shareholders that the Laiki board received satisfactory information regarding the pricing and share swap ratios before proceeding with the offers to Marfin and Egnatia as well as the minority shareholders of Laiki Hellas.
Furthermore, Deutsche Bank and KBW gave positive recommendation on the pricing and swap ratios, which were taken into consideration.
Additionally, Styliandes said the bank’s Executive Management Committee examined due diligence reports prepared by KPMG on Marfin Financial Group and crucial matters related to Egnatia and Laiki Hellas, despite the fact that Marfin and Egnatia are listed companied on the ATHEX, they are rated by international rating agencies and foreign analysts cover the shares of Marfin.
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Lanitis statement
Laiki board member Platon Lanitis thanked Vgenopoulos for the zeal and hard work with which he is working to help the merger succeed and for his determination to proceed despite the “mud and dirty tricks thrown at him.”
“As a board member and a fellow shareholder (the largest and oldest Cypriot shareholder) the Lanitis family stands firmly behind Mr. Vgenopoulos and we are backing the deal as good and in the best interests of shareholders, employees and the country in general,” said Lanitis.
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Minority rights
Vgenopoulos then told shareholders that he is the first to protect and respect minority rights, explaining how in 1998 when as a small shareholder, he and a group of other investors managed to campaign against Philip Morris, the majority shareholder of a small company called Pavlides, which was operating in violation of minority shareholder interests.
“For us the minority shareholders are essential and fully respected provided they act in the best interests of the bank.”
He also publicly apologized to Stelios Bekris, a self-declared activist for referring to him as the grocer (his previous occupation before he became a stock broker), but said this was done when he was frustrated at the way Bekris was insisting that the triple merger is not good, at a time when major international firms were saying the merger would create value.
“Moody’s, Fitch and S&P say the merger will create value. UBS has issued a buy recommendation on Laiki with a price target of CYP 4.30 and says once the merger is completed, it will upgrade its target. CSFB has issued a buy recommendation on Marfin with a price target of EUR 46 per share and says after the merger, it may hike the target to EUR 50. And yet despite all this and scores of other favourable analysis and reports, a group of 5-20 people say the deal is not good,” said Vgenopoulos.
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Marfin is buying
“Search the truth why those saying they are against the deal are really doing so. Could it be for other interests?” asked Vgenopoulos who sent a strong message that Marfin will continue to buy Laiki shares in order to defend the bank against aggressive selling tactics launched by some who wish to drive the Laiki share price lower.
“It’s a pity that there a number of small shareholders who panic and sell at the lows, and each time witness missed opportunities.”
He also repeated his previous statement that Marfin will continue to support the Laiki share price when it comes under hard-sell pressure, always buying on dips and when the share price is forced lower, but never when it is climbing, in order not to distort the true fundamentals of the stock, which since Marfin became involved with, has surged by 60% to the current level of CYP 3.50.
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Tell Lazarides to come…
Referring to Kikis Lazarides’ allegations of being bribed, Vgenopoulos challenged the former Chairman that even if he has an inkling of ethics left in him to produce the document that he claims contains the proof that, in the words of Lazarides, “Vgenopoulos tried to bribe me to back the deal.”
Vgenopoulos told shareholders to tell Lazarides to come forward and distribute the document, instead of waving it in the air from far away.
“I’m waiting for him,” said a confident Vgenopoulos, cheered by hundreds of shareholders.
“The river cannot turn back and the water is crystal clear and transparent,” said the new power-head of Laiki referring to the triple merger and all procedures.
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No conflict of interest
Vgenopoulos also silenced the few complaining about conflict of interest when he revealed that when the decisions were taken regarding the Marfin share swaps, he and his fellow members from Marfin did not participate.
Furthermore, Laiki’s present Chairman Neoclis Lyssandrou assured shareholders that none of the board members hold shares in Marfin or Egnatia, quashing speculation that board members were gaining from the recent rally in the share price of Marfin and Egnatia.
“Only Marfin is buying Laiki shares to protect against large scale and deliberate hard selling tactics to force the share price lower.”
As to a petition by a lone shareholder to give more time to study the information package, Vgenopoulos brushed aside those concerns by saying that “a week is more than enough time to study and reach a decision.”
Judging by the mood of shareholders, a vast majority are expected to back the motion to proceed with the triple merger and the name change next week at the EGM, as they will vote in favour of the new management and its ambitious plans to boost shareholder value.
