William Malcolm

PPF, MONETA Agree $1.2B Deal To Challenge Top Czech Banks

Moneta Money Bank has signed a framework agreement with companies from the PPF Group regarding the acquisition of Air Bank, the Czech and Slovak Home Credit and Benxy. The acquisition is conditional on the approval of the bank’s shareholders at an extraordinary general meeting to be held in June. 

Through the acquisition, Moneta will acquire from the PPF Group one hundred percent of the shares of the Air Bank Group for a total purchase price of CZK 25.90 billion. This will be paid from CZK 2.59 billion of the bank’s surplus capital and from CZK 23.31 billion obtained by paying the issue price by the PPF Group for subscription 291,375. 000 newly issued shares of Moneta. The new shares will be issued at CZK 80 per share and will increase the bank’s total capital. The purchase price will be paid upon settlement of the acquisition.

Moneta’s management managed to negotiate a cosmetic discount, when the original ratio indicated CZK 27 billion, says Cyrrus analyst Tomáš Pfeiler. However, according to him, the price that Moneta would pay for the assets of the Air Bank group remains exorbitant. For Moneta’s shareholders (apart from the shareholders of the PPF Group), this is an unfavorable transaction, from which they will be able to exit for a low CZK 80 per share, added Capitalinked.com analyst Radim Dohnal.

“Given the current stake, PPF is well on track to pursue its intentions. However, Moneta shares are now held by activist investors who do not agree with the proposed price. they voted to block the transaction, “Pfeiler said.

The total number of issued Moneta shares will increase from 511 million shares to 802,375,000 shares. The acquisition will dilute the current position of shareholders by 36.31 percent. Following the acquisition, PPF will own an estimated 55.38 percent of the bank’s shares, and will therefore have to make a mandatory takeover bid consisting of the purchase of up to one hundred percent of Moneta’s shares at a price of at least CZK 80 per share. Unless the Czech National Bank sets a different price.

The value of the bank should be at least CZK 40.9 billion, which represents 1.5 times the value of equity at the end of 2020 and 15.7 times the net profit for last year. The acquisition is expected to be settled on October 1, 2021. It must be preceded by the approval of the Extraordinary General Meeting of Shareholders, approval by the Czech National Bank and the National Bank of Slovakia, and obtaining the antitrust approval of the European Commission.

PPF now has a stake in Moneta of about 28 percent. It also acquired a stake thanks to a share repurchase offer for CZK 80 per share.

PPF Group Petr Kellner, who died in March, invests in many industries, from financial services, telecommunications, real estate, engineering to biotechnology. At the end of the first half of the year, PPF owned assets worth 44 billion euros (approximately 1.15 trillion crowns) and employed 98,000 people worldwide.

Moneta Money Bank has been operating under its current name since 2016. At that time, the bank’s name was changed from the former GE Money Bank in connection with its listing on the stock exchange in May of the same year. Moneta is one of the largest companies traded on the Prague Stock Exchange.