February 27, 2019 / 8:38 AM / 8 months ago

Shares in Czech bank MONETA rise after Air Bank deal fails

PRAGUE, Feb 27 (Reuters) - Shares in Czech lender MONETA Money Bank rose on Wednesday after Home Credit Group pulled out of a deal to sell its Czech and Slovak businesses to the bank after MONETA lowered its proposed offer price following shareholder pressure.

Consumer finance group Home Credit, part of the Czech Republic’s richest businessman Petr Kellner’s PPF financial group, said on Tuesday evening it had ended talks with MONETA on the sale, which included smaller rival Air Bank.

MONETA shares rose as much as 1.6 percent in early trade on Wednesday and were up 1 percent at 79.95 crowns at 0820 GMT.

The decision came after MONETA cut its proposed price for the acquisition on Friday, a move motivated by feedback from shareholders who feared overpaying and giving Home Credit too much clout in MONETA through the cash, stock and debt deal.

MONETA’s shares had lost nearly 13 percent at one point after the Air Bank deal was announced on Oct. 8 and by Tuesday’s close had fallen 3.4 percent since the deal was announced.

“Shares were under selling pressure since the acquisition was announced,” J&T Bank analysts said in a client note. “Although we saw the transaction positively from a long-term view, shares should react positively in the short term.”

The deal was to be one of the biggest in Czech banking in years and would have bolstered MONETA’s position in a domestic market dominated by foreign-owned banks.

Under the revised terms of the deal, the cash, stock and debt transaction was worth 18.5 billion crowns ($821 million), below the originally proposed 19.8 billion crowns, MONETA said last week.

Home Credit said on Tuesday the valuation reduction was “not justified”. MONETA, after confirming the end of talks, said it remained open to acquisition or merger opportunities.

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

$1 = 22.5300 Czech crowns Reporting by Jason Hovet; Editing by Susan Fenton

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