Hungary’s privatization agency on Thursday said it hold sold 33 million shares in the bank for Ft 2,025 ($10.85) per share. The sale surprised market players, who had expected a tendering process. The minister said the bank had generated revenue of Ft 80 billion ($428 million) in the two-phase privatization after investing Ft 8 billion in the bank over the last ten years.
Veres said that none of the buyers held more than 5% of the bank’s shares: “We probed strategic investors early summer, including on the price, and they were only willing to pay significantly less.” Sources familiar with the transaction said strategic investors were not interested because German insurer Allianz, which owns 9.9% of FHB, holds two-thirds of preference shares, which essentially guarantees it veto power. Sources told Reuters that Allianz was approached but declined to sell the stake and also would not pay the price the government had asked.
The unexpectedly rapid sale caught some investors off-guard as the government earlier said it preferred to sell to a strategic investor in order to maximize price and ensure FHB maintained its credit rating. But on Friday, CEO Daniel Gyuris said the bank’s ratings were not in danger, despite the company’s free float rising to 88%. An initial opinion from ratings agency Moody’s prior to the transaction also supported this view. (m&c.com, reuters.com)
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