Strong was, as expected, the interest of institutional investors for the 27% (finally) held by the Financial Stability Fund in Piraeus. A vote of confidence that once again goes beyond the limits of a systemic bank and extends to the entire Greek capital market, with its upgrade to the mature in the background.
TXS: Decides on the weekend of March 2 and 3 for the placement of Piraeus
The first day of book building was as the market expected. The coverage ratio exceeded 6, as a result of the hard work done by both the management and those involved, in order to enter the “Piraeus code” into the investment options of foreigners for 2024. And with the stock at multi-year highs, the entry of new did not appear to be affected. On the contrary, in fact, as there was a crowd from the first minutes to participate in the process.
And it was this demand that led to the extraordinary meeting of the Financial Stability Fund in order to decide to allocate its entire participation in Piraeus Bank, i.e. 27%, instead of the 22% with which the Public Offer was opened today. It is therefore expected that the parallel process of book building will be completed with a large over-coverage by investors, signaling the constantly renewed confidence of foreign investors in the Greek economy and its businesses, especially the banks.
The allocation
The lion’s share will be given, as in the case of Ethniki, to the institutions, with private individuals estimated by stock market sources to be given in a ratio of 1 to 5 or 1 to 6. Nevertheless, according to information, the final determination will be the price at which the percentage will be made available, with yesterday’s rise leaving expectations for a price approaching 4 euros.
After all, this is also the desire of the HFSF, which wants to achieve the best possible price for 27% of Piraeus, which at 4 euros yields 1.35 billion and at 3.70 euros yields 1.24 billion. In any case, however, the market will have to be patient until March 6, when the offer book will close at 16:00 Greek time.
The penultimate act of disinvestment
The sale of the 27% share package of Piraeus Bank through a Public Offer is the fourth consecutive de-investment of the HFSF by the systemic banks and the second through a public offer after the highly successful public offer of the National Bank that preceded it last November.
We remind you that in 2023, within a period of less than six months, which has no precedent internationally, and taking advantage of the international momentum in favor of the Greek economy and the recovery of investment grade, the management of the Fund achieved a series of disinvestments (Eurobank, Alpha Bank , National Bank) which brought in approximately 1.45 billion Euros to the public treasury and “opened up” the appetite of international investors for placements in the Greek market.
The same sources state that the disinvestment of the HFSF by Piraeus is taking place at the ideal time and in terms of the bank’s performance, which confirms the complete consolidation and an impressive return to growth and profitability, as a result of the long-term and systematic work done by its management Bank in collaboration with the HFSF.
It’s the National team’s turn
After the completion of the placement, the HFSF will have successively withdrawn within a few months from the share capital of Eurobank, Alpha Bank and Piraeus Bank and will own only 18% of National Bank after the successful placement of last November for 22% of shares.
In this context, the start of the process for the remaining shares in NBG is expected as soon as possible.
It is estimated that by autumn, the full privatization of the big four in the industry will be completed. And that’s because:
· First, the Greek government is called upon to capitalize on the positive momentum to send another signal of the banking sector returning to normalcy
Secondly, there is always the risk that the conditions in the markets will deteriorate, making the terms of disposal of the National Bank share package more difficult
· Third, there cannot be two speeds between system groups. All banks should return to the private sector, as the participation of the HFSF in their share capital entails a series of rights for the public, which act as a deterrent to the further expansion of the investment base.
· Fourth, the upcoming changes to the criminal code will remove the immunity of bank executives.