Croatian gov't turns down ESB bid for national postal bank

The Croatian government on Thursday turned down a binding bid from Erste&Steiermaerkische Bank (ESB) for the purchase of the 99.13% stake in the Croatian Postal Bank (HPB), with an explanation that the offered price was too low.

Finance Minister Slavko Linic told the cabinet's meeting that the ESB was the only one to submit the binding offer, while the other potential buyer -- OTP bank-- that had made a non-binding bid, backed out and never submitted a binding offer.

ESB lowered the price per HPB share by HRK 232.29 kuna from HRK 1,138 in the non-binding bid to 905.71 kuna per share in the binding offer, Linic said.

He presumes that during due diligence ESB came to a conclusion that the Croatian bank was burdened with too many claims and that it could not cover all lending.

The minister recalled that shares of the HPB, which are listed at the Zagreb Stock Exchange (ZSE), were now being traded at the price of HRK 1,200 per share.

The sum of HRK 790 million offered by ESB would cover only 54% of the HPB's capital base.

The offered price is too low for a bank that managed to recover from losses in 2010 and 2011, and that has a growing number of clients, Linic said.

(Hina)



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