Greece’s Eurobank is set to increase its stake in the Hellenic Bank of Cyprus to 68.81 % from 55.962% following an agreement with employee associations, while also acquiring 8.58% of Demetra Holdings, a major shareholder of the Cypriot financial institution, which owns a 21.3% stake.
This development marks a significant step towards merging the Cypriot credit institution with the Greek group, contingent on the agreement of all shareholders, as the initial attempt to reach a merger was faced with the opposition of employee associations and the Demetra fund.
Eurobank agreed to acquire 12.848% Hellenic Bank’s shares for approximately 243 million euros, or 4.58 euros per share. Through this agreement, the sellers achieved a 79% premium.
According to the announcement, the transaction is subject to regulatory approvals and will be completed upon fulfillment of these conditions, no sooner than February 8, 2025.
The Greek credit institution furthermore announced share purchase agreements with the Cyprus Bank Employee’s Welfare Fund, the Cyprus Union of Bank Employees Health Fund, and the Cyprus Employees Provident Fund, under which it will acquire an 8.58% stake in Demetra Holdings for approximately 32.4 million euros.
It should be noted that Demetra Holdings holds a 21.3% stake in Hellenic Bank, making it the bank’s second-largest shareholder.
The accounting value of Demetra’s stake in Hellenic Bank represents 77% of its net equity, according to the published figures on June 30, 2024.
JP Morgan remained “bullish” on Greek banks, including Eurobank stressing stock buybacks and accelerated amortization of Deferred Tax Credits (DTC) will act as catalysts.
