MONETA shareholders back share issue for $1.2 bln Air Bank deal

PRAGUE, Dec 20 (Reuters) - MONETA Money Bank (MONET.PR) shareholders on Monday backed the Czech bank's proposed 25.9 billion crown ($1.15 billion) acquisition of domestic peer Air Bank and a stock issue to pay for it, as MONETA seeks to build a bank that can compete with foreign lenders that dominate the Czech market.

The approval comes after shareholders had rejected a previous share issue plan in June that would have given investment group PPF, which owns Air Bank and is MONETA's biggest shareholder, majority control in the bank.

The acquisition of Air Bank is aimed at propelling MONETA, the sixth-biggest Czech bank, into the top tier of the country's lenders.

Under revamped terms of the financing of the acquisition, approved by 77.9% of present shareholders on Monday, MONETA will launch a two-round share issue next year open to all shareholders, not just PPF, and aiming to raise at least 20.95 billion crowns ($935.23 million).

The new terms were better received by analysts and investment advisory firms such as Institutional Shareholder Services (ISS), which recommended that shareholders approve the deal after taking a negative view of the plan voted down six months ago.

PPF was founded by late Czech billionaire Petr Kellner, who died in March in a helicopter crash on a ski trip in Alaska, and holds assets worth 40 billion euros ($45 billion) in various sectors spanning from North America to Europe and Asia.

The acquisition will merge PPF's 11-year-old Air Bank business, the Czech and Slovak units of global consumer lender Home Credit and peer-to-peer lender Zonky with MONETA to create a bank with a customer base of 2.5 million, almost a quarter of the Czech population.

The combined entity, concentrated largely on retail and small-business lending, would target annual net profit of at least 8.5 billion crowns from 2024, MONETA has said.

MONETA aims to launch the share issue of 255.5 million new shares - raising the amount of outstanding shares to 766.5 million - next May, with the first round offered at 82 crowns a share, a discount to closing levels before the new deal was announced last month.

PPF, which owns a near 30% stake in MONETA, has agreed to take up unsubscribed shares, providing a backstop. The group would also have to launch a mandatory offer after crossing the 30% shareholding threshold.

Shares in MONETA traded up 0.7%% at 92.80 crowns on Monday and are up 36% this year, on expectations of the Air Bank deal and a rally in bank stocks across central and eastern Europe.

($1 = 22.4370 Czech crowns)

($1 = 0.8884 euros)

Reporting by Jason Hovet Editing by David Goodman and Susan Fenton

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