February 21, 2019 / 7:00 PM / 8 months ago

Czech lender MONETA lowers bid for Air Bank after shareholder feedback

PRAGUE, Feb 21 (Reuters) - Czech lender MONETA Money Bank said on Thursday it was lowering its offer for rival Air Bank and other assets belonging to Home Credit Group, after seeking better terms following discussions with its own shareholders.

Under the revised terms of the deal, the cash-and-stock transaction would be worth 18.5 billion crowns ($817.61 million), below the originally proposed 19.8 billion, MONETA said.

The deal, announced in October, is one of the biggest deals in Czech banking in years and would bolster MONETA’s position in its domestic market, which is dominated by foreign-owned banks.

MONETA CEO Tomas Spurny said earlier this month that after discussions with its shareholders the company was trying to negotiate a “more palatable” valuation for the deal to buy Air Bank and Home Credit’s Czech and Slovak consumer finance businesses. Home Credit is part of the PPF empire of Petr Kellner, the Czech Republic’s richest man.

The revised offer would not exceed 1.9 times the equity of the target firms when the deal closes, MONETA said.

It would involve issuing shares to current and new shareholders, limiting the stake taken by Home Credit’s owners - investment groups PPF and EMMA Capital - to 15 percent, instead of the previously proposed 24.48 percent, MONETA said.

Shares would be issued to the vendors at 78.5 crowns per share, ex-2018 dividend, while additional shares to existing and new shareholders would be at the market price. The deal would also include additional Tier 1 and Tier 2 capital instruments.

The revised deal also limits the number of seats offered to Home Credit Group on the merged company’s nine-member supervisory board to one seat instead of two, it said.

MONETA shares closed on Thursday at 77.95 crowns.

The bank said it aimed to conclude negotiations on the terms of the deal by March 8 and, if successful, propose it to its shareholders at an annual meeting in the second half of April.

Home Credit Group is active in consumer lending around the world. It is 88.6 percent owned by Kellner’s PPF group. Emma Capital, controlled by Kellner associate Jiri Smejc, owns 11.4 percent.

MONETA is owned in a 100 percent free float after General Electric’s financial wing listed the bank in 2016.

The acquisition would give MONETA more scale to compete with the three biggest Czech banks by assets: KBC’s CSOB bank, Erste Group’s Ceska Sporitelna and Societe Generale’s Komercni Banka. MONETA would be rebranded as Air Bank. ($1 = 22.6270 Czech crowns) (Reporting by Jan Lopatka; Editing by Susan Fenton)

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