MKB willing to pay 6 RON per Romexterra share

The representatives of Hungarian bank MKB are offering the shareholders of Romexterra, one of the small banks on the market, a price of 6 RON (1.66 euros) per share, a little more than double the nominal value, which now stands at 2.8 RON (0.77 euros), market experts told ZF.
At this price, it means MKB is offering about 40.64 million euros for at least 51% in Romexterra. Were every Romexterra shareholder to subscribe, the Hungarians should come up with nearly 80 million euros.
The offer of the Hungarian bank, a subsidiary of German lender Bayern LB will stand for 60 days. Each of the 100,000 shareholders will be notified by mail, with information also made available through the 43 branches of Romexterra.
At first sight, the Hungarians at MKB will pay less than the Greeks at ATE Bank, who have recently signed the takeover agreement for Mindbank, one of the smallest banks in the system.
In Mindbank’s case, the Greeks offered 0.953 RON (25 eurocents) per share, almost five times more than the par value. The Greeks’ price thus appraised Mindbank at 62 million euros, that is 2.15 times the value of the net assets at the end of 2005.
ATE Bank paid 32.06 million euros for a stake of 50.94% in Mindbank, whose market share stands at 0.27%.
On the other hand, MKB is to pay approximately 8 million euros more for Romexterra for about the same stake. Romexterra’s market share was 0.9% after the first half.
Romexterra’s network comprises 43 branches, while Mindbank’s comprises only 12.
Romexterra posted gross profit upwards of 5 million euros in the first half, an increase of 122% on the same time last year. Its profit at the end of 2005 amounted to 6.2 million euros, about three times higher than Mindbank’s.
Moreover, once taking over Romexterra, MKB is also supposed to take over Romexterra Leasing in which Romexterra Bank holds 89.6% and Romexterra Finance brokerage firm, where the bank owns 69.3%. The deal, however, is tied to MKB reaching a minimal threshold of 51%. The 60-day deadline wherein the Hungarian bank intends to buy the controlling interests could be extended, too, due to the extreme shareholder dispersion of the bank, the quoted sources say.
The representatives of MKB, the third leading player on the Hungarian banking market, signed an agreement in Budapest early this month in order to take over Romexterra.
MKB announced it planned to finance the development plans for Romexterra Bank through syndicated loans and bond issues denominated in RON and euros. The officials of the Hungarian bank have announced plans to develop the Romanian bank by expanding the network to 150 branches by 2015 from the current 43, increasing the number of clients to 700,000 on the retail segment and to 70,000 on the corporate segment (including 40,000 SMEs). MKB also believes it can get Austrian, German and Hungarian multinationals to join the ranks of Romexterra clients. Romexterra will have to boost its share of the lending market from 0.8% to 3.8% and the share of the deposit market from 1.1% to 3.6% by 2010.