Bank of Cyprus rejects 3 offers from Lone Star for share buyback

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NICOSIA, Cyprus – Cyprus’ largest bank, Bank of Cyprus, said on Friday it had rejected three successive cash offers in the past three months by LSF XI Investments LLC to buy all of its share capital on the grounds that they “fundamentally undervalue” the financial institution.

In a statement, the bank’s board said the first offer was made on May 5 at a price of 1.25 euros ($1.26) per share, followed by a second 15 days later at 1.31 euros ($1.32) per share.

The third offering from Dallas-based, Cayman Islands-registered LSF XI Investments – also known as Lone Star – was made on July 8 at a price of 1.51 euros ($1.52) per share.

The board said it ‘unequivocally’ rejected the offers because, in addition to undervaluing the business and its future prospects, they were ‘not in the best interests of the business “.

He added that the attempted takeover of Lone Star “does not adequately address the complexities of completing a transaction to acquire Bank of Cyprus, given its strategic importance to Cyprus.”

The Bank of Cyprus has been burdened with bad debts since the 2013 financial crisis that forced Cyprus, on the verge of bankruptcy, to secure a multi-billion euro bailout deal with its eurozone partners. It also led to the seizure of hundreds of millions of uninsured savings at the Bank of Cyprus and the closure of its second lender, Laiki Bank.

The Bank of Cyprus board said it was committed to becoming a “stronger, safer and more focused institution” and expects a return to dividend distributions next year.

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