Cyprus legal shakeup

Cyprus will clarify the role of its securities regulator after a takeover tussle involving Marfin Popular, Bank of Cyprus (BoC) and Piraeus Bank ended up in the island’s Supreme Court, Cyprus Finance Minister Michalis Sarris said yesterday. Cyprus’s Securities Commission suffered a setback on Thursday after the court of appeals issued an interim injunction overturning the watchdog’s January 16 decision to block Marfin (MPB) from mounting takeover bids for Bank of Cyprus and Piraeus, Greece’s fourth-largest lender. The court said the island’s stock exchange was the competent authority to take decisions on the bid, and not the Securities Commission. «We are now improving the legislative framework. Many of the responsibilities for such bids are contained in the stock exchange law, but they should really belong to the Securities Commission,» Sarris said. MPB tendered for the rival banks on January 12. Its offer came hours after Piraeus launched a bid for Marfin, valuing MPB at about half its market value. Although the merits of the case are to be debated again in court on February 11, Cyprus’s securities regulator has said it plans to appeal the Supreme Court’s decision that questioned its competency. Thursday’s decision taken by one judge can go to the next level of appeal, which is a three-bench court. Yesterday, Greece’s securities regulator sought clarifications from Cyprus’s stock exchange on whether Marfin Popular could bid for Piraeus Bank. And Piraeus Bank said it would submit extra documents to the Cyprus bourse on its tender for at least 40 percent of MPB. In its January 12 twin bid, Marfin Popular offered 2.842 of its shares for each Piraeus share, valuing the Greek lender at about -6.9 billion ($8.9 billion), approximately its current market value. It also offered 1.241 of its shares for each BoC share, valuing the Cypriot lender at about its current market capitalization of 6.1 billion. Bank of Cyprus, the island’s largest commercial bank, has rejected the offer. Dubai Investment Group, whose Dubai Financial unit holds a 17 percent stake in MPB, has rejected Piraeus Bank’s offer to take over Marfin Popular. Separately, Greek insurer Aspis Pronia and its affiliate Commercial Value yesterday said their tender to buy a controlling stake in small Cypriot lender Universal Bank has been approved by the island’s central bank. Aspis and Commercial are offering 1.1 Cyprus pounds per share for at least 20 percent and up to 50 percent plus one share in Universal, the Greek lender said in a bourse filing. The bid values Universal at about 16.6 million Cyprus pounds ($37.05 million), based on the 15.13 million total shares in issue. Universal Bank has 17 branches across Cyprus. (Reuters)

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