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The reactions of international and Greek investors are at the origin of his decision Eurobank absorb Grivalia with the valuation of the bank following the closing of the meeting of 23 November.
The valuation agreed by both boards exceeds the bank's share and therefore leads to potential sales.
The same investors, they add, do not disagree with the structure of the operation (merger, creation of a special vehicle for loans) but with the price chosen to conclude the transaction.
As we will see later, the bank investor worries about the valuation taken into account for the bank and the fact that it concerns investors in Grivalia is the fact that they will receive bank shares that they expect future profits and if the reduction of problem loans.
These reactions can not even be ruled out during the presentations abroad and at the general meetings of Eurobank and Grivalia of 8 April 2019.
According to investors, the valuation of Eurobank during the merger is low and the merger of a profitable real estate company to 4%.
The majority of the properties in Grivalia's portfolio, which will be added to the Bank's badets, are rented by the State, which creates a risk of not generating revenue if a different policy is decided.
Allegations relating to foreign funds are mainly based on the fact that the bank has decided to merge, and not on a higher valuation (for example, EUR 0.80), so that the bank's shareholders suffer losses and hold actions. which will be diluted due to the issuance of new shares.
The share is high
The share of Eurobank amounts to 2.147 billion. shares and capitalization of 1 billion euros.
If Grivalia were to be formed today and not in April 2019, when the decisions of the general meetings would be taken, Eurobank would have a total market value of 1.68 billion euros, or 1 billion euros. 39, euros, the present value.
This means that the Eurobank P / BV starts at 0.40. According to calculations by foreign investors, when Eurobank's share reaches 1 EUR, the price will be equal to 0.66 times the book value. (P / BV), which is high compared to European banks.
In addition to this large volume of shares (3.45 billion shares), the bank will have to proceed to a reverse division of the stock, a trend that investors always see negatively, depending on the history of securities.
Why was it taken into account? 15 days?
The same investors criticize the fact that the merged consultants took into account the merger, not the international standards, but the average of the last 15 days, which coincided with the bank's cancellation by the bank. MSCI International Index.
By the international investment bank the law?
There are also objections to the fact that, according to the advertisements, an opinion on the fairness and reasonableness of the Farvey notice will be rendered by an international investment bank.
Pressure was exerted on the FSF
Given that the Financial Stability Fund has already developed its own proposal to reduce non-performing exposures (Italian model with credit capitalization), foreign investors also claim that FSB management has been under pressure to promote the solution. of this problem. merger and give its badent to the Eurobank-Grivalia agreement.
The reactions of Greek investors
The first reaction of Greek investors is that they themselves bought shares in a real estate company and that they will now hold bank shares. In addition, Grivalia primarily chose a high dividend yield of 5.5% at a time when deposit, bond,
In addition, shareholders of Grivalia report that the largest shareholder had made a public offer for an amount of 8.80 euros, which was unsuccessful because the title includes some of the largest international investors. The legitimate question for shareholders of Grivalia is that the shareholder decides himself to merge at a lower price than the public bid he has proposed.
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