ESB Holding proposes 450 kuna per share for remaining shares of Erste Bank

Erste&Steiermärkische Bank d.d. has reported that it has today received a notification from its majority shareholder, ESB Holding, regarding the intention to acquire the remaining shares of the Bank, and will propose a price of 450 kuna per share to minority shareholders.

Erste&Steiermärkische Bank announces that it has today received a notification from its majority shareholder, društva ESB Holding, informing about the intention to propose to the Bank’s General Assembly the adoption of a Decision on the transfer of shares of minority shareholders of the Bank to ESB Holding, in exchange for the payment of compensation in accordance with the provisions of the Companies Act, as stated in the bank’s announcement.

ESB Holding owns a total of 16.319.956 ordinary shares of Erste&Steiermärkische Bank, which represents 96.09 percent of the total issued shares of the Bank and gives the right to 96.09 percent of the total number of votes at the Bank’s General Assembly, thus holding the status of the main shareholder of the Bank, the bank emphasizes. In order to determine the cash compensation to be paid to minority shareholders, ESB Holding has engaged društvo Nexia revizija d.o.o., a Croatian member of the Nexia International group.

"Based on that assessment, a compensation amount of 450 kuna per share will be proposed, which is 30 percent higher compared to the average share price of the Bank in the previous three months achieved on the Zagreb Stock Exchange," the announcement states. It is also added that the Commercial Court in Rijeka has appointed the auditing firm Deloitte d.o.o. as a court expert to examine the appropriateness of that compensation for the Bank’s minority shareholders.

This transaction, as stated, reflects the joint strategy of Erste Group Bank and Steiermärkische Bank, shareholders in društvo ESB Holding, aimed at simplifying the management and administration of the Bank. Shares of Erste&Steiermärkische Bank have low trading volume on the Zagreb Stock Exchange, and that turnover, for example, decreased by 77 percent between 2007 and 2009.

After the completion of the valuation process and subject to receiving the report on the appropriateness of the compensation from the court-appointed expert, ESB Holding will submit a request to the Bank for convening the General Assembly with the aim of adopting the proposed decision, and will also justify the appropriateness of the specified amount of compensation, as stated in the announcement.

The share capital of Erste&Steiermärkische Bank is divided into 16.984.175 shares with a nominal value of one hundred kuna each, and ESB Holding owns 96.09 percent of the shares, while all other minority shareholders, about 1.530 legal and natural persons, together hold 664.219 shares, or 3.91 percent of the shares.

Erste&Steiermärkische Bank today also published a notice for the General Assembly of the bank, which will be held on June 29, for which it is proposed that from last year’s profit, which amounted to 609.9 million kuna, the amount of 453.6 million kuna be allocated to retained earnings, and 153.3 million kuna for dividends to shareholders. The dividend would amount to 9.03 kuna per share, according to the announcement.