Private equity firms’ interest in Greece rising?

The largely family-run character of Greek firms and their low capitalization, which rarely exceeds 1-1.5 billion euros (with the exception of banks), have been the main deterrents to entry by foreign hedge funds and private equity firms, which have had a low presence in Greece to date. This year alone, hedge funds and private equity firms internationally are estimated to raise over $240 billion – 9 percent more than in 2006 – through mergers and acquisitions. This phenomenon may be sweeping global markets but has largely avoided Greece, with only a handful of exceptions: Hyatt, Forthnet,TIM – which was recently resold and renamed Wind – Axon-Euromedica, and this month the recent interest expressed in Aegean Airlines. In the case of Hyatt, three of its hedge fund stakeholders, Halcyon Asset Management, York Capital and ABN Amro Asset Management, informed the Capital Market Commission in a letter on September 11, 2006, that private equity firm BC Partners, which controlled 81 percent, was forcing them to sell their shares. They expressed concern about the practices being followed by BC Partners. The three main shareholders of Forthnet (Novator Equities, Cycladic Catalyst Master Fund and the Foundation for Research and Technology) proceeded on January 11 with the placement of 9.1 percent of its share capital with foreign and Greek institutional investors so as to increase the dispersion and marketability of Forthnet shares. The Liakounakos group announced on June 11 its having agreed with Noonday Asset Management of the Farallon group on the entry of funds into the share capital of Euromedica. Noonday will contribute 50 million euros to the increase of Euromedica’s share capital and another 10 million euros will be covered by Axon Holdings. The extraordinary general meeting of Euromedica shareholders has been set for June 30. Stock market sources suggested that hedge funds as well as private equity firms may well be eyeing several other Greek-listed companies with an outward-looking attitude, such as Sarantis, Fourlis and Sidenor.

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