Petr Kellner’s PPF Group’s second effort to take over Moneta Money Bank is once again encountering resistance from shareholders. The British fund Petrus Advisers strongly opposed the proposed transaction. In the presentation to the shareholders, they called it a poisoned offer.
The fund stated that the offer is without substance and was dreamed up by Moneta’s executive director Tomáš Spurný and PPF owner Petr Kellner. “We are concerned that the transaction is presented more or less the same as the failed 2018 proposal only in new clothes,” said the fund’s presentation, which is available to the E15 daily. The title of the document is Poisoned offer to save PPF Group’s banking activities. Petrus Advisory advises shareholders to reject Kellner’s bid.
PPF Group would like to merge its financial companies Air Bank, Benxy (which operates peer-to-peer lending under the Zonka brand), and Czech and Slovak Home Credit with Moneta Money Bank. A similar proposal from 2018 failed.
Now, however, PPF wants to sweeten the offer to small shareholders, to whom it offers to buy shares for the price of 80 crowns per share. The price on the stock exchange is now ten crowns lower. PPF wants to buy up to a fifth of Moneta’s shares, while the purchase of ten percent depends on the Czech National Bank’s approval.
As three years ago, the award of Moneta and the financial companies PPF is a stumbling block. According to the Petrus Advisory fund, Moneta is valued at 1.55 times equity, while PPF’s assets are valued at 2.45 times equity. “The offer to buy in the amount of 80 crowns seems fair to me. According to public information, the second part of the transaction is at least twice overpriced, “says the head of the investment company Hartenberg Capital, Jozef Janov, who privately invested in Moneta shares.
The second part of the transaction is also perceived as problematic by Cyrrus’s portfolio manager Tomáš Pfeiler. “In the resulting entity, Moneta’s assets will weigh 60.3 percent, and the Airbank Group’s assets 39.7 percent. The result of such a mix is an extremely optimistic valuation of the Airbank Group’s assets,” adds Pfeiler. According to him, the transaction would make strategic sense, but with a different conversion ratio – a lower valuation of Airbank’s assets.
Other experts similarly express themselves. “It makes sense, there are synergies where you look, but it’s about prices,” says a leading Prague banker, who did not want to be named. According to him, both groups would save the cost of the consumer credit business. However, shareholders would not have to know the positive impact due to the high price of PPF’s assets.
The British fund points out that Zonka’s service is loss-making in the long run, and Air Bank then has half of its net interest income on loans to other companies in the PPF Group.
Due to the recession, the quality of consumer loans in the Home Credit portfolio will deteriorate. “It does not have a buyer at Home Credit and Air Bank, where it works to connect with PPF,” says the current transaction, the financier, who did not wish to be named.
If the shareholders approve the transaction, Kellner’s group will acquire a controlling stake in Moneta. The Board of Directors of Moneta is to comment on the redemption by January 29.