HFSF: UniCredit acquires 9% of Alpha for 1.39 euros per share

The Transaction took place following the completion of the tender process initiated by the HFSF on October 30, 2023

The Financial Stability Fund announces that it has agreed to the sale of its entire stake in Alpha Services and Participations SA, namely two hundred eleven million one hundred thirty eight thousand two hundred ninety nine (211,138,299) common registered shares, corresponding to a percentage of 8, 9781% of the paid-up share capital and voting rights of Alpha, to UniCredit S.p.A., in accordance with the terms of the share purchase agreement entered into between HFSF and UniCredit on November 12, 2023.

The Transaction took place after the completion of the tender process initiated by the HFSF on 30 October 2023, following UniCredit's binding offer for the acquisition of the Shares, received by the HFSF on 23 October 2023.

UniCredit purchased all of the Shares for an amount of €1.39 per Share, which corresponds to an increased price (premium) of 9.4% compared to the undisturbed closing price of the Share on the Athens Stock Exchange on October 20, 2023, which was the last business day prior to receiving the Offer, and at a discount of 0.4% to the closing price of the Share on the Athens Stock Exchange on November 10, 2023.

In the context of the transaction, Lazard Frères SAS acted as Disposition Advisor and Rothschild & Co acted as Strategic Divestment Advisor. The law firm of Skadden, Arps, Slate, Meagher & Flom (UK) LLP and the Kyriakidis Georgopoulos law firm acted as external legal advisors to the HFSF.

Psaltis: “Alpha Bank becomes 100% private again”

Alpha Bank is once again becoming 100% private with the entry of a first-line strategic investor, Alpha Bank CEO Vassilis Psaltis says in a statement on the occasion of the Financial Stability Fund's acceptance of UniCredit's offer for the acquisition of the whole of his participation in the Bank.

In his statement, Mr. Psaltis states: “Today's development is a historic milestone in the long course of our Bank. Alpha Bank, the historically private Bank of Greece and the one with the largest shareholder base, is once again becoming 100% private, with the entry of a first-line strategic investor. I thank the Management of the HFSF, the Fund's Advisors, the people of Alpha Bank and UniCredit who worked intensively on the implementation of this important strategic agreement, and everyone who contributed in their way so that we could open this important new chapter in the history of Alpha Bank. I am confident that today's development creates significant opportunities for further development and value creation for our Bank, but above all, it will bring multiple benefits to the banking system and the economy of our country”.

The improved offer and the agreement

As MR wrote yesterday, UniCredit submitted an improved offer compared to the one it had submitted to the HFSF on October 20, raising the price for the acquisition of 9% of Alpha Bank at 1,390 euros per share from 1,333 euros before. The improvement of the offer was submitted after the completion of the competitive process, which did not highlight another prospective investor or investors for the acquisition of the percentage controlled by the Fund in Alpha Bank.

The improved offer included a premium of 9.48% over the date of the proposal, when the share price was at €1.27 on the board, and is marginally lower than Friday's close of €1.395 per share. The Fund is asked to accept UniCredit's offer on the basis of the price improvement, which raises the amount it will collect to 293.5 million euros against 268.2 million euros that was the previous offer. It should be noted that the book value of the Bank amounts to 5.9 billion euros and its capitalization stands at 3.28 billion euros, so it trades close to 55% of its book value.

In the framework of the strategic cooperation signed by Alpha Bank and UniCredit, the two parties have agreed:

• in the merger of UniCredit Romania and Alpha Bank Romania, creating the 3rd largest bank in Romania, holding 12% of the market by total assets. The merger, as the CEOs of the two Groups stated in the investor briefing, “is a milestone for the local market, due to the combination of two complementary clienteles in a high-growth country, with UniCredit Romania and Alpha Bank Romania having a strong presence in the sectors of business and retail banking, respectively”. The merger of the subsidiaries in Romania is expected to impact UniCredit's CET1 ratio by approximately 15 basis points and, together with the commercial partnership based on the high potential of new products and services, is expected to increase, on a current profitability basis, by more than 100 million euros its net profitability
  UniCredit. Upon completion of the transaction, Alpha Bank is expected to retain a 9.9% stake in the new bank and receive a consideration of €300 million. The overall transaction keeps Alpha Group's net profit expectations unchanged, while further enhancing capital reserves by more than 100 basis points, driving the return on tangible equity (RoTE) higher by at least 50 basis points, with potential for further upside; arising from the trade agreement.
• in UniCredit's acquisition of 51% of the share capital of the insurance company AlphaLife, a 100% subsidiary of Alpha's life insurance company active in the pension and savings products sector,
• in the distribution of UniCredit onemarkets mutual funds through the network of Alpha Bank, which serves more than 3.5 million customers in Greece.

Through the sale of the activity in Romania, Alpha will “lighten” its balance sheet, reducing risk weighted assets, thus freeing up capital at a time when further capital strengthening of Greek banks is a dominant objective, aided by the gains brought by rising interest rates. The single Bank in Romania will have loans of more than 10 billion euros, deposits of more than 12 billion euros, revenues of 660 million euros and net profits of 300 million euros. As announced, the transaction keeps the Bank's net profit expectations unchanged, while strengthening its capital reserves by more than 100 basis points, driving the return on equity by 50 basis points higher, with the possibility of further increase through the commercial agreement.