Bulgaria’s First Investment Bank (FIBank) made the only binding bid to buy smaller local lender MKB Unionbank, Bulgarian newspaper Kapital reported, quoting sources familiar with the process.
Three other potential investors, including Hungary’s OTP Bank, which owns Bulgaria’s second-largest lender DSK Bank, did not put in binding bids, the report said.
According to the report, FIBank offered about 100 million leva for MKB Unionbank, but any deal would also have to include a cash injection of about 350 million leva to replace short-term liquidity injected by the lender’s current shareholders.
MKB Unionbank is owned by Hungary’s MKB Bank, itself a subsidiary of German Bayerische Landesbank (BayernLB). As part of its restructuring plan, approved by the European Commission last year, BayernLB has to sell most of its foreign subsidiaries, as well as repay the state aid received in 2008 and 2009.
The group sold its Romanian subsidiary, MKB Romexterra Bank, to a group of investors led by PineBridge Investments, the former asset management arm of AIG.
But BayernLB is no rush to sell off its foreign assets and could postpone the sale if it deems the price too low, the report said. Under the terms of its state aid repayment scheme, the German bank has to repay three billion euro by 2017 and a further two billion euro by 2019.