PRAGUE (Reuters) – Czech financial group PPF and MONETA Money Bank have agreed to terms to combine their Czech lending assets, creating a challenger for the country’s three largest banks valued at Kroner 64.2 billion (3 , $ 01 billion), MONETA said Thursday.
As part of the signed deal, MONETA will buy rival small bank Air Bank and other assets of PPF, a group built by the richest Czech, Petr Kellner, who died in a helicopter crash in March.
PPF, already MONETA’s largest shareholder with just under 30%, will increase its stake to 55.4% if other stakeholders support the acquisition at a June general meeting.
MONETA will also buy the Czech and Slovak units of PPF from global consumer lender Home Credit and peer-to-peer lender Benxy, paying Kronor 25.90 billion ($ 1.21 billion) for all assets.
MONETA’s customer base will grow by over 70% in the combined group to 2.4 million, nearly a quarter of the Czech population and more than the country’s current third-largest banking group, Komercni Banka.
Most of the purchase price from PPF was to come from 23.31 billion crowns from the issuance of 291.4 million new shares at 80 crowns per share and taken over by PPF.
The transaction would bring MONETA’s share base to 802.4 million shares, leading to a 36.3% dilution for existing shareholders.
MONETA had a market cap of 38.4 billion crowns at Tuesday’s closing price of 75.10 crowns.
PPF is making a second attempt to take control of MONETA, the first having failed after MONETA shareholders demanded a lower valuation of PPF’s assets in 2019.
The current deal has also met with opposition from some shareholders, including the investment group Petrus Advisers, which raised its stake to over 5% and called the attempt “disturbing”.
MONETA Managing Director Tomas Spurny supported the merger.
PPF would be forced to issue a mandatory bid at Kroner 80 per share, MONETA said, although PPF has declared its intention to maintain the MONETA list.
MONETA, which has a strong focus on the retail and small business segments, is the sixth largest bank in the Czech market, dominated by foreign owners such as KBC in Belgium, Erste Group Bank in Austria and Societe Generale in France.
($ 1 = 21.3330 Czech crowns)
Reporting by Jan Lopatka and Jason Hovet in Prague Editing by Matthew Lewis