Third time a charm for BCR?

Banca Comerciala Romana (Romanian Commercial Bank – BCR), the crown jewel, has attracted no buyers. Not even on the second call.
The failure had been largely anticipated even before the second announcement for sale, with the authorities grounding it on the unfavourable international circumstances. What is going to happen next? Sources in the privatisation commission say the strategy will be modified as to allow the entry of the institutional investors, IFC and EBRD. According to the current strategy, the two institutions may buy up to 10% in BCR, but only after a strategic investor has been selected. The order could be reversed, though.
Another option was mentioned by PM Adrian Nastase himself as a “theoretical” possibility two months ago – the listing of a minority stake on the Stock Exchange. Analysts, however, are saying the listing on the Bucharest Stock Exchange (BSE) would be pointless as the low absorption capacity of the market would not secure a fair price for the shares of the largest Romanian bank. This may work only if the listing were simultaneously done on a foreign market, London, perhaps, which should lead to a price arbitrage.
The IMF and the World Bank will not have the privatisation halted, even though they agree the market is not good for such a transaction. Privatisation commission sources say the easiest “way out” is accepting IFC and EBRD as investors, especially since the IFC has already allotted $75 million for BCR shares.
“Such an extensive acquisition in Romania is not justified,” Bank Austria Creditanstalt (BA/CA), a member of the German group HVB, concluded after the bid it had placed as equal partner with the Hungarian OTP Bank was not accepted by the Romanian authorities. BA/CA was the only bidder the authorities would have had no trouble accepting the first time, had it not come together with OTP. Neither did the French Eulia come back the second time around, after having been rejected the first time due to the prevailing state capital.
Although having recently announced “new signals” showing interest in BCR’s privatisation, Minister Ovidiu Musetescu had to see for himself no major strategic investor was interested. His hopes were rather high even though the deadline for submitting letters of intent had expired (Friday 5 p.m.), given that the privatisation commission secretaries were still waiting for some investor lost in the traffic in Bucharest to show up at that time.
A bid eventually came in, or was rather faxed in after the expiry of the deadline. It had been sent by  Czech insurance company Ceska Pojistovna and was not even considered, because it did not meet the terms in the ad for sale.
“Following talks with reputed international banks, it became obvious to us that, in spite of the potential interest for BCR, the pressures even the most important banks are facing have led to a decline in the appetite for acquisitions.” This is how the Privatisation Authority (APAPS) chose to explain the second failure to find a buyer for BCR. The bank is appraised at more than one billion dollars, which means a serious effort from any buyer.