PPF, MONETA agree $1.2 billion deal to challenge top Czech banks

PRAGUE (Reuters) -Czech financial group PPF and MONETA Money Bank agreed on terms to combine their Czech lending assets, creating a challenger to the country’s three biggest banks valued at 64.2 billion crowns ($3.01 billion), MONETA said on Thursday.

Under the signed deal, MONETA will buy smaller rival Air Bank and other assets from PPF, a group built by the richest Czech, Petr Kellner, who died in a helicopter crash in March.

PPF, already MONETA’s largest shareholder with just under a 30% share, will raise its stake to 55.4% if other stakeholders back the acquisition at a June general meeting.

MONETA will also buy PPF’s Czech and Slovak units of global consumer lender Home Credit and peer-to-peer lender Benxy, paying 25.90 billion crowns ($1.21 billion) for all the assets.

MONETA’s customer base will grow by more than 70% in the combined group to 2.4 million, nearly a quarter of the Czech population and more than the country’s current third-largest banking group Komercni Banka.

Most of the purchase price to PPF was to come from 23.31 billion crowns in proceeds from the issuance of 291.4 million new shares at 80 crowns per share and taken up by PPF.

The deal would raise MONETA’s share base to 802.4 million shares, leading to a 36.3% dilution for existing shareholders.

MONETA had a 38.4 billion crowns market capitalisation at Tuesday’s closing price of 75.10 crowns.

PPF is making a second attempt at taking control of MONETA, the first one having failed after MONETA shareholders demanded a lower valuation of PPF’s assets in 2019.

The current deal has also run in to opposition from some shareholders, including investment group Petrus Advisers, which has boosted its stake to more than 5% and has called the attempt “disturbing.”

MONETA’s chief executive, Tomas Spurny, has backed the tie-up.

PPF would be obliged to launch a mandatory offer at 80 crowns per share, MONETA said, though PPF has said it intended to keep MONETA listed.

MONETA, focused heavily on the retail and small-business segments, is the sixth-largest bank in the Czech market which is dominated by foreign owners such as Belgium’s KBC, Austria’s Erste Group Bank and France’s Societe Generale.

($1 = 21.3330 Czech crowns)

Reporting by Jan Lopatka and Jason Hovet in PragueEditing by Matthew Lewis