Lone Star interest in Bank of Cyprus upsets government; PVC Europe exits Benvic

Cypriot government 'is faced with a race against time' to ensure it has the power to prevent a potential takeover of the Bank of Cyprus.

Good morning Eurohubsters, Craig McGlashan here with the Dealflow.

I hope those of you who had a day off yesterday enjoyed the long weekend – and those that didn’t enjoyed the normal weekend! We start off the shortened week with a bit of controversy.

Cyprus bill. There’s been a lot of news over the last few months about top antitrust officials in the US scrutinising the private equity industry. But Cyprus is taking things one step further – with lawmakers looking to pass a bill to combat a US private equity firm’s interest in the country’s largest bank.

The Cyprus Mail reported on Sunday that the Cypriot government “is faced with a race against time” to ensure it has the power to prevent a potential takeover of the Bank of Cyprus – which the report said has a 45 percent share of the country’s banking market – by Lone Star.

Dallas, Texas-headquartered Lone Star has had three buy-out proposals rejected by the board of the Bank of Cyprus, but still has until the end of September to make more offers.

The Cyprus Mail quoted someone it called a “top official” as saying: “This is a private equity firm that wants to buy a systemic bank, with a wealth of assets, on the cheap, for a quick return, and this could pose a serious threat to the economy.”

The government is looking at tabling a bill that would create “a legal framework for examining direct foreign investment”.

The Bank of Cyprus is headquartered in Strovolos.

Exit. PVC Europe Group, an independently managed investment subsidiary of Investindustrial Growth, has agreed the sale of the compounds business of Benvic Group to International Chemical Investors Group.

Benvic Group’s medical activities in Italy are expected to be retained by Investindustrial funds.

Benvic Compounds is headquartered in Chevigny-Saint-Sauveur, France. The company develops, produces and markets thermoplastic solutions based on PVC as well as engineering polymers and bio-polymers compounds. It employs 630 people full-time.

Benvic Compounds has grown organically and inorganically since Investindustrial’s entry, having made eight add-on acquisitions across Europe and the US. The company has rolled out several ESG related action plans to reduce its CO2 emissions and to eventually achieve carbon neutrality on direct scopes.

“Benvic has thrived under our ownership as a result of a strong industrially-driven plan, with a clear investment rationale that has been executed with care and precision by our teams and management,” said Andrea C Bonomi, chairman of the Industrial Advisory Board of Investindustrial.

Investindustrial is a Luxembourg-based group of independently managed investment, holding and advisory companies with over €11 billion of raised fund capital.

The buyer, Luxembourg-headquartered International Chemical Investors, is a privately owned industrial group with sales in excess of €3 billion and nearly 4,000 employees across the globe.

Location, location, location. Finally, UK wine merchant and Fortress Investment Group portfolio company Majestic announced on Monday that it is looking to grow its retail footprint and is offering “a year’s supply of wine to anyone who can help us find new sites”.

I’m not sure the returns on that deal would be quite what private equity firms are used to, but I imagine it’d provide a lot of fun regardless.

That’s it from me – we’ll speak again on Wednesday.