Komercijalna banka is currently traded at a P/B of 0.66, which is lower than the transaction multiple of P/B 0.77 concluded in early February 2020.
Today NLB has published a Takover Intention Notification in daily newspaper Politika (newspaper that is regularly distributed on entire territory of Serbia). The Takeover Intention Notification regards the acquisition of:
- all remaining regular shares of Komercijalna banka at the point of publishing not in NLB‘s ownership (2,820,270 shares or 16.77% of this class of shares) and
- all priority shares of Komercijalna banka (373,510 or 100% of this class of shares)
NLB’s takeover intention states that it intends to submit Takeover Approval Request to Serbian Securities Exchange Commission (“SEC”) within a period of 15 business days and publish Takeover Bid immediately (latest the next following day) after obtaining the corresponding approval from SEC.
Such news do not surprise us, given that NLB has a 100% stake in virtually all of its subsidiaries, so a squeeze out seemed to be a natural course of action. We note that Komercijalna banka is currently traded at a P/B of 0.66, which is slightly lower than the pricing of the acquisition announced in February 2020.
As a reminder, in late February 2020, NLB announced that they have acquired the entered into a share purchase agreement with the Republic of Serbia for the acquisition of an 83.23% ordinary shareholding in Komercijalna Banka.
NLB acquired the 83.23% shareholding for the amount of EUR387m, which will be payable in cash on completion. Such a price puts the transaction multiple at P/B 0.77 and P/E 6, while it implies a valuation of EUR 465m for the 100% stake in Komercijalna Banka. We also note that in accordance with Serbian bank privatisation regulations, NLB was not required to launch a mandatory tender offer for minorities’ shareholdings in Komercijalna Banka.