Eurobank on Friday announced a further increase in its ownership share of Hellenic Bank, with the bank disclosing that it has reached an agreement with Senvest Management LLC to acquire a 1.6 per cent stake in the Cypriot bank.

This development comes on the heels of another major agreement, where Eurobank secured a deal with Pimco to acquire a substantial 17.3 per cent stake in Cyprus’ second-largest bank.

This additional share increase will consequently raise Eurobank’s overall stake in the bank to 48.1 per cent.

“Following the bank’s statement on August 23, Eurobank announces the successful conclusion of a Stock Purchase Agreement (SPA) with Senvest Management, LLC,” the announcement stated.

“The agreement entails Eurobank’s acquisition of a 1.6 per cent stake, equivalent to 6,587,676 shares, in the publicly traded entity Hellenic Bank,” it added.

According to the announcement, the transaction is valued at €15.5 million, translating to €2.35 per share. Notably, this price point aligns with the terms of the Pimco agreement.

In its announcement, Eurobank explained that the terms of this agreement “may be adjusted depending on the completion date of the transaction and the terms of the subsequent public offer”.

As per the legal framework outlined by the Public Takeover Bids Law of the Republic of Cyprus, Eurobank, upon the transaction’s completion, will be obliged to initiate a Mandatory Public Offer for all shares of Hellenic Bank that are not owned by Eurobank at that time.

In this context, the chairman of the Cyprus Securities and Exchange Commission (CySEC) George Theocharides on Thursday stated that Eurobank should proceed with a mandatory public offer to the shareholders of Hellenic Bank for the acquisition of 100 per cent of the bank’s capital.

Discussing the necessary legal procedures for Eurobank’s increased stake acquisition in Hellenic Bank, Theocharides clarified that the finalisation of this transaction hinges on securing essential permissions from regulatory bodies.

These bodies include the Central Bank of Cyprus (CBC), the European Central Bank (ECB), the Single Supervisory Mechanism (SSM), and the Commission for the Protection of Competition.

Furthermore, the Chairman of CySEC pointed out that this process is anticipated to span multiple months before reaching completion.

Theocharides expounded on how, according to Cyprus’ legal framework, when a corporation obtains more than 30 per cent of the share capital of a publicly listed company, it is obliged to extend a public offer to the shareholders of that company, aiming to acquire the entirety of its share capital.

For Eurobank to achieve success, it would need to secure a minimum of 50 per cent plus one share of Hellenic Bank’s shares, thereby gaining controlling interest.

This implies that after attaining 46.5 per cent through the aforementioned regulatory green lights, an additional 3.5 per cent plus one share would be required to fulfil this criterion.

When posed with the query about whether Hellenic Bank should withdraw from the stock exchange upon Eurobank’s attainment of 50 per cent plus one share, Theocharides responded in the negative.

Finally, he added that, in order for a publicly traded entity to delist, an acquisition of more than 90 per cent of its share capital is mandatory, facilitating the forced buyout of minority shareholders.