BRUSSELS: Belgian based KBC Group (KBC) and the National Bank of Greece (NBG), the Greek parent company of United Bulgarian Bank (UBB) reached agreement on December 30 2016 for KBC to acquire ownership of UBB and leasing services provider Interlease.
The deal is for 99.9 per cent of UBB, the fourth-largest bank in Bulgaria in terms of assets with a eight per cent market share as at the end of September 2016 (11 per cent market share in retail, 8 per cent market share in corporate) and 100 per cent of Interlease, the third-largest provider of leasing services in Bulgaria with a 13 per cent market share, for a total consideration of 610 million euro, a media statement by KBC said. KBC said that it would use internal sources/available funds to pay the acquisition price in cash.
Before closing of the transaction UBB intends to make a 183 million euro extraordinary dividend payment to NBG subject to authorisation from the Bulgarian National Bank.
The statement said that the purchase price reflects the 183 million euro extraordinary dividend and represents a 1.10x multiple of the 2016 expected Tangible Book Value of UBB and Interlease and a 1.29x implied multiple of the 2016 expected Tangible Book Value adjusted for negative net asset value adjustments amounting to 81 million euro which KBC identified during the due diligence process.
“The acquisition will have a very limited impact on KBC’s solid capital position (-54 basis points), keeping the CET1 ratio (3Q16: 15.3 per cent) well above regulatory minimum capital requirements,” the media statement said.
