Yesterday, NLB published an announcement that they have decided to increase the share offer price for the acquisition of Addiko from EUR 20 per share to EUR 22 per share, on cum dividend basis. This represents an increase of 10% and implies a total takeover transaction (if 100% shareholding is achieved) of EUR 429m, as compared to EUR 390m in the initial offer. This also represents an increase in the P/B of the acquisition, from the initial 0.48x to the new 0.52x.
Ever since NLB announced its intention to acquire Addiko, there has been much speculation about whether the Group will be able to acquire Addiko. The main reason for this doubt is the fact that two Serbian businessmen, through Agri Europe Cyprus, and Alta Pay Group, have acquired 9.99% and 9.63% of Addiko’s shareholding recently, respectively. Furthermore, Agri Europe Cyprus also offered to purchase another 17% stake in Addiko. Alta Pay Group also had agreements with several other major and minor shareholders, bringing their shareholding to a total of over 36%.
However, recently this Company decided to drop out of these agreements, which came after it was revealed that only 31% of shareholding through conditional agreements was reported, instead of 36%. While it is unknown whether this had any effect on the other shareholders stopping these agreements, whether Alta Pay Group decided to drop it themselves, or whether the NLB offer was the most enticing, Agri Europe Cyprus and NLB are the only ones right now who remain in the race for the acquisition.
On 7 June, NLB launched an all-cash voluntary takeover for the acquisition of Addiko shares for EUR 20 per share cum dividend. This also coincided with the period during which Agri Europe Cyprus was also in the process of acquiring an additional 17% in Addiko, which would bring its total shareholding to 27%. The offer by Agri Europe Cyprus amounted to EUR 16.24 cum dividend, which means that NLB offered significantly more for the acquisition.
Speculation has been abound about whether NLB will be able to acquire Addiko, and how much of it. One of the main reasons for this is the fact that NLB aimed at the majority, even if not full control, with a minimum goal of 75% in Addiko’s shareholding. Even before this new offer, NLB’s offer would imply a transaction of EUR 390m at 100% of shareholding, implying a P/B ratio of 0.48x. The new offer, updated yesterday, increases the offer to EUR 22 per share cum dividend, which would mean that the total transaction amounts to EUR 429m, with a P/B of 0.52x, an increase of 10% compared to the initial price.
As compared to the 6-month volume-weighted average share price (VWAP), this is a premium of 34.4%. It also implies a premium of 15.8% compared to the closing price on 14 May 2024, before NLB’s announcement, and a 45.2% premium as compared to the share price on 22 March 2024, the last closing price before Agri Europe Cyprus announcement of its partial tender offer for Addiko shares.
As a reminder, Addiko’s acquisition would expand market shares across many markets that NLB is present in, including Slovenia, Bosnia & Herzegovina, Serbia, and Montenegro. At the same time, it would also allow indirect entrance into the Croatian market. NLB’s CEO also added that they are very pleased that Addiko’s Management Board is of the view that NLB as a universal regional systemic bank presents a coherent strategy regarding the future of Addiko.
The acceptance period for the takeover offer is 16 August 2024.
Total transaction value, P/B of transaction offers for Addiko Bank (as of 16 July 2024, transaction value in EURm)*
Source: NLB Group, Addiko Bank, Austrian Takeover Commission
*Agri Europe Cyprus aimed for a partial takeover, of 17%. Presented here is only the transaction amount for said 17%.
Overall, this could be seen as a positive development, both for NLB and Addiko shareholders. The offer for the total acquisition is sure to suit investors more than a partial takeover offer, especially when we consider the significant premium in NLB’s offer as compared to Agri Europe Cyprus. As such, this could surely lead to higher chances of success for the entire acquisition endeavor launched by NLB Group.
