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Bank of Cyprus Holdings PLC could receive a revised offer proposal from LSF XI Investments LLC, which is part of US private equity firm Lone Star Funds, having rejected three previous approaches.
Lone Star on Tuesday confirmed it was ‘considering its options’ around making a revised offer for the Strovolos, Cyprus-headquartered financial services firm, but has not decided whether to do so yet.
Any offer proposal would be for acquisition via a scheme of arrangement, as defined by Irish statutory standards, as opposed to a ‘takeover bid’ under Cypriot takeover law, it said.
Lone Star's first proposal was made in early May, at a price of €1.25 per share, which Bank of Cyprus rejected, prompting Lone Star to increase the price to €1.38 per share.
The third and final proposal was made in early July at €1.51 per share. Bank of Cyprus also rejected the offer, on the grounds that the bid fundamentally undervalued the company.
At that time, the bank said that the proposal did not adequately address the complexities of completing a transaction, without proper consideration for its ‘strategic importance’ to the country of Cyprus.
Responding on Tuesday, Lone Star stated: ‘Lone Star recognises the company's strategic significance to Cyprus. As a global investor with a strong track record of investing in the financial sector including Germany's IKB Deutsche Industriebank AG and Portugal's Novo Banco SA, Lone Star takes its custodianship of strategic financial institutions seriously as well as ensuring businesses flourish under its ownership.’
Lone Star has until September 30 to announce a firm intention to make an offer, or withdraw from the takeover process.
Shares in Bank of Cyprus closed up 3.3% to 111.00 pence each in London on Tuesday.
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