Austrian group Erste will buy the minority stake held by local investment fund SIF Oltenia in BCR, the biggest lender in Romania, the group announced.

Erste will pay EUR 140 million for the 6.29% stake SIF Oltenia holds at BCR, which values the whole bank at EUR 2.22 billion. Following this deal, Erste will hold 99.88% of BCR’s shares.

SIF Oltenia is the only one of the five Romanian investment companies (SIFs) that didn’t sell its stake in BCR in 2011, when Erste made an offer to take over their shares. At that time, Erste offered to pay EUR 435 million, in cash and own shares, for 24.12% of BCR, valuing the bank at EUR 1.8 billion.

Thus, SIF Oltenia will get a slightly better deal than the one in 2011. The transaction will take place in one tranche and Erste will pay the price in cash.

The transaction values BCR at a price/book multiple of 1.35x, in line with market valuations for Romanian listed banks.

BCR is the biggest lender in Romania, with total assets worth EUR 15.4 billion as of March 31, 2018. The bank recorded a net profit of EUR 146 million in 2017.

Erste took over 61.9% of BCR from the Romanian state, EBRD and IFC, in 2006, for EUR 3.7 billion. The Austrian group then bought another 7.2% of BCR from the bank’s employees and 24% from four investment companies (SIFs).

editor@romania-insider.com