Five bidders likely for a stake in Banca Comerciala Romana
BUCHAREST – As the deadline looms for bids for Banca Comerciala Romana (BCR), a dearth of late bidders looked like leaving the way open for the five groups who have already pitched for this year’s largest Eastern Europe bank sale. So far, ING of the Netherlands, Germany’s Hypovereinsbank, France’s state-owned Eulia – set up by savings bank Caisse d’Epargne and bank Caisse des Depots et Consignations – and Hungary’s OTP have confirmed interest in the Romanian bank as part of their expansion plans. A fifth bank, which lodged a letter of interest in June but whose identity was not disclosed by the Romanian privatization agency APAPS, is also on the cards. Yet analysts said the chances for last-minute suitors, attracted by the opportunity to be the market leader in a potential future European Union member, were slim ahead of this week’s deadline to lodge letters of intent. «It doesn’t look like a big crowd… it doesn’t seem there would be a fight over the price between these bidders,» said Libor Slechta, director at rating agency Fitch IBCA. Under a plan agreed with the International Monetary Fund (IMF), Romania is to sell 51.88 percent in its banking crown jewel, whose 127.6-trillion-lei ($3.8-billion) assets make up one-third of the country’s total banking assets, to a strategic investor. Good timing The state’s stake in BCR, which promises growth in a market of over 21 million people where only one in three adults has a bank account, has an estimated value of around $1 billion. Analysts were surprised that banks from two of Romania’s main trading partners, Italy and Greece, traditionally keen to expand in the Balkans, did not announce their interest in BCR. «It’s probably too big for Greek banks… (but) I was expecting the Italians to participate,» Slechta said. Analysts said the timing of BCR’s privatization, although made difficult by the world slowdown, was good from Romania’s point of view. «Romania is now clearly heading West, while a few years ago things were still in a gray area,» independent analyst Florin Petria said in reference to the country’s hope for being invited to join NATO at the alliance’s November summit in Prague. But although net profit at BCR surged by 75 percent in the first half to around $97 million from the same period in 2001, the tough conditions in world markets might deter potential bidders. «Banks in Western Europe have other priorities now,» Petria said. However, analysts said the apparent lack of surprises did not mean the sale would be a flop. «The quality of the bidders is more important than their number,» Slechta said. Short-listed bidders will be notified by September 12 and will have to sign confidentiality agreements. The deadline to submit binding bids is October 31. The IMF agreed to the postponement of the deadline to complete the sale to end-February 2003 from the initial end-December 2002, due to delays in appointing Daiwa Securities SMBC Europe to advise on the sale.
