April 28, 2020 / 7:21 AM / a month ago

Blackstone says coronavirus crisis could derail NIBC deal

AMSTERDAM (Reuters) - Private equity firm Blackstone (BX.N) said on Tuesday its proposed 1.36 billion euro ($1.47 billion) takeover of NIBC Holding NV (NIBC.AS) might not win regulatory approval, sending shares in the Dutch bank 12% lower.

“There is substantial uncertainty concerning the business plan and it continuing to be a realistic basis for obtaining regulatory clearance,” Blackstone said. “The relevant regulators have not yet given any indication of their views in this respect.”

NIBC shares traded down 12% at 0900 GMT in Amsterdam.

Blackstone also warned that NIBC’s decision to postpone its dividend payments meant it could no longer guarantee the financing of the deal.

NIBC this month decided to postpone dividend payments at least until the second half of the year, as European banks came under pressure to improve their capital positions to be able to weather losses caused by the coronavirus pandemic.

Blackstone said this decision left a hole of almost 60 million euros in its offer, as it had committed to provide a little over 1.3 billion euros in equity, with the remainder to be financed with NIBC’s dividend payout.

It said it would try to work out a solution with NIBC that would lead either to direct payment of the promised 0.53 euros final dividend per share or at least a guarantee that the money would be paid before the settlement date of the offer.

Under Blackstone’s original proposal, U.S. private equity firm JC Flowers, which holds 60.6% of NIBC’s stock, would sell its stake for 8.93 euros per share. Dutch investment firm Reggeborgh, which owns 14.6%, would sell for 9.65 euros per share.

JC Flowers bought NIBC from Dutch pension funds in 2005 for 1.8 billion euros, but the financial crisis of 2008 derailed its plans to sell the bank at a profit.

The U.S. firm eventually sought a listing for the bank in 2018, selling a 25% stake at 8.75 euros per share.

NIBC, which services around 600 small firms and 400,000 retail clients in the Netherlands, made a net profit of 194 million euros last year.

Reporting by Bart Meijer; editing by Catherine Evans and Jason Neely

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