Bank Intesa, Ukrsotsbank Deal Deadline Approaching

The Financial Times ran a story this morning calling Bank Intesa’s USD 1.3 bln deal for Ukrsotsbank (USCB: BUY) “in jeopardy.” The deal will expire if not completed by the end of March. In September, Bank Intesa announced that it had renegotiated the terms of its purchase agreement for a controlling stake in Ukrsotsbank. According to Intesa’s press statement, the new agreement values Ukrsotsbank at USD 1.4 bln and Banca Intesa will acquire an 88.55% stake, which implies a purchase price of just under USD 1.24 bln. Alexander Viktorov: The FT’s story seems a bit alarmist considering there is no new news here. Bank Intesa is already neck deep in this deal and has proven to be quite willing to meet any demands to see this through. Intesa is now awaiting approval from the National Bank and according to our sources Ukrsotsbank’s owners are using their influence to stall the sale, meaning the only way forward is to pay a higher price. As we said in our report from June 30 2006, if the deal does not meet the deadline it is unlikely to hurt Ukrsotsbank, as the bank’s shareholders will easily find suitors willing to pay more.