CySEC monitoring BoC takeover offers, Senvest increases share percentage

Cyprus Securities and Exchange Commission (CySEC) chairman George Theocharides on Thursday said that the commission is closely monitoring the non-binding takeover offers submitted by private equity firm Lone Star for the Bank of Cyprus.

The commission is also in consultation with both the Bank of Cyprus and the corresponding supervisory authority in Ireland, the Irish Takeover Panel.

“The Cyprus Securities and Exchange Commission is closely monitoring the matter and whether the provisions of the relevant takeover law are being observed,” Theocharides said.

“CySEC is in consultation with both the Bank of Cyprus and the corresponding supervisory authority in Ireland, the Irish Takeover Panel, the country in which the Bank of Cyprus is registered, to see that the provisions of the legislation of both Cyprus and Ireland are being respected”, he added.

Moreover, the CySEC chairman said that some issues fall under the jurisdiction of the commission, while others fall under the jurisdiction of the Irish Takeover Panel. This, he explained, is something that must be clarified going forward.

On August 19, the Bank of Cyprus said that it had received and unanimously rejected “unequivocally” three unsolicited, conditional, non-binding proposals from Lone Star relating to a possible cash offer for the entire issued, and to be issued, share capital of the company.

The bank’s announcement at the time added that Lone Star offered €1.51 ($1.51) per share for the bank.

This followed two previous offers made by the private equity firm. The first offer, which arrived on May 5, 2022, offered €1.25 per share, which the Bank of Cyprus’ board of directors rejected on May 20, after a period of careful consideration with its financial advisors and consultants.

The second offer arrived on May 25, 2022, with Lone Star offering €1.38 per share, which the bank’s board of directors unanimously rejected on June 3, 2022.

Following the rejection of the second offer, on June 16, 2022, Lone Star once again approached the bank, asking to discuss issues pertaining to the second offer.

It has been reported that the financial terms discussed on June 16, 2022, remained unchanged from those presented in Lone Star’s second offer, prompting the bank to reject this request on June 29, 2022.

The third offer was received on July 8, 2022, at the aforementioned price of €1.51 per share, before its rejection on July 22, 2022.

According to reports, the third offer was rejected unanimously by the board because it undervalues the bank, both in the present but also in terms of its future prospects.

The offer was deemed to not have been in the interest of neither the bank nor its shareholders

“In addition to fundamentally undervaluing the company and its future prospects, the board believes that the proposal from Lone Star does not adequately address the complexities of completing a transaction to acquire Bank of Cyprus, given its strategic importance to Cyprus,” the Bank of Cyprus board of directors said at the time.

At the same time, a source from Senvest Management LLC told the Cyprus News Agency (CNA) that the company acknowledges the progress that has been achieved at the Bank of Cyprus and that is the reason it has acquired additional shares.

This week, Senvest Management proceeded with the acquisition of an additional one million shares in the Bank of Cyprus, bringing its total share percentage to 7.79 per cent, up from its previous figure of 7.11 per cent.

Senvest Management’s latest share acquisition comes at the back of two previous acquisitions earlier this summer, bringing the total number of shares being acquired between June and August to approximately 3 million.

Senvest Management is the Bank of Cyprus’ third-largest stakeholder after Lamesa Investments Limited with 9.27 per cent and Carval Investors with 8.75 per cent.

“In recent months, Senvest has been increasing its percentage in the share capital of the Bank of Cyprus, seeing the progress that has been achieved at the Bank of Cyprus and the very good prospects that have opened up after the normalisation of the bank in terms of non-performing loans, as well as the profitability prospects which they are helped both by the reduction in NPLs and by interest rate increases by the European Central Bank”, the source told the agency.

“The last purchase, which was made in August, is an indication of Senvest’s support for the management of the Bank of Cyprus and its actions,” the source concluded.