Eurobank locks in 50%+ of Hellenic Bank via Wargaming
21:23 - 30 August 2023
Wargaming has agreed to sell Eurobank its remaining stake (6.8% or 28,023,767 shares) in Hellenic Bank for €65.9 million (€2.35 per share).
As noted in a 30 August announcement from the gaming company, the consideration is subject to possible adjustments depending inter alia on the timing of the completion and the terms of the subsequent mandatory tender offer that Eurobank will be obliged to launch once its shareholding exceeds 30% in the share capital of Hellenic Bank.
At the same time, provident funds of the directors and senior management of Wargaming have also agreed to sell their entire stake (0.4% or 1,686,245 shares) in Hellenic Bank shares to Eurobank for €4.0 million (€2.35 per share) on the same terms.
The sale agreements are subject to Eurobank obtaining the relevant regulatory approvals and will only be completed once the approvals are granted. Until then, Wargaming and the provident funds shall continue having the full legal and beneficial ownership of the shares together with all rights attached thereto.
The goal of Wargaming’s investment in Hellenic Bank was to support the Cyprus economy and make the lender more robust – a goal that has been fully achieved. Eurobank is a credible counterparty (and not an opportunistic investor), that can add value to Hellenic, hence Wargaming’s decision to sell its investment to Eurobank, the announcement said.
It is worth noting that Wargaming’s investment in Hellenic Bank totalled €127 million. The company took part in the bank’s share capital increase in 2013, amidst the then Cypriot banking and economic crisis, with Hellenic Bank being the only Cypriot bank that adequately covered its private sector capital needs during the crisis, without requiring state aid or a haircut on deposits. Wargaming has participated in all share capital increases of the bank over the past decade.
It is also recalled that last April the acquisition by Eurobank of 13.41% of the share capital of Wargaming in Hellenic Bank was successfully completed, with the receipt of the relevant supervisory approvals.
The new development, namely the agreement to acquire the remaining 6.8% that Wargaming continued to hold in Hellenic Bank, comes in addition to Eurobank's announcements last week regarding the agreements it made to further strengthen its share in Hellenic Bank.
First, there was the announcement of the agreement to acquire all the shares of Poppy Sarl (17.3%), an acquisition which, once completed subject to the fulfillment of the regulatory approvals to which it is subject, will raise Eurobank's percentage to 46.5%, and subsequently, an agreement with Senvest Management LLC for the acquisition of a 1.6% share in the share capital of Hellenic Bank, thus increasing Eurobank's participation - subject to obtaining the necessary approvals here as well - to 48.1%.
Given that, as stated in Wargaming's announcement, in addition to the sale of 6.8% of the company, the sale of the entire percentage of Hellenic Bank shares held by the provident funds of Wargaming's top management was also agreed upon, the percentage purchased by Wargaming Eurobank totals 7.2%.
Thus, with the approval by the supervisory authorities, of both the agreements with Wargaming and those that preceded last week, Eurobank's participation in Hellenic will rise to 55.3%, thus gaining it full control.
It should be noted that Cypriot legislation requires that when a company acquires more than 30% of the share capital of a company listed on the Stock Exchange, it makes a public offer to the shareholders of that particular listed company in order to acquire all of its share capital.
In order for the public offer to be successful, it will have to acquire at least 50% plus one share in order to have control, a development that in the case of Hellenic Bank, Eurobank seems to be locking in.