The most influential investment bank on Wall Street, Goldman Sachs, has valued Banca Comerciala Romana (BCR) at 3.8 to 5.8bn euros, taking into account a multiple of 3 to 4.5 times the accounting value of what is Romania''s largest bank.
"In a scenario we deem as realistic, BCR could be sold for 4.9bn euros, that is 3.8 times the accounting value estimated for this year. This means the value of the transaction involving the 62% stake being sold by the Romanian state should be of some 3bn euros," Goldman Sachs analysts say.
In other words, the American bank believes BCR''s privatisation could be the most expensive transaction of its kind ever conducted in Central and Eastern Europe.
At a price of 4.9bn euros, the buyer would be paying some 15.6 million euros for a branch and nearly 1,100 euros per customer. One percent of BCR''s market share in terms of assets will therefore be worth around 190 million euros. Goldman Sachs points out that this is only one of the possible outcomes of the negotiations between the Romanian state and the banks lined up for the privatisation race.
The US-based bank judges the minimum value of BCR to be 3.8bn euros, three times its accounting value, while a multiple of 4.5 would lead to a price considered the maximum possible.
"The time of cheap acquisitions in Central and Eastern Europe is long gone. The line up of nine banks in the start of the BCR privatisation makes us think that the Romanian bank may even benefit from a first assessment even compared to similar transactions in the region," the Goldman Sachs analysts explained. They went on to say that buyers of banks in Central and Eastern Europe had paid 2.2 to 5.2 the accounting values since 1999.
The expiry of the deadline for submitting financial bids for BCR is less than two weeks away, on October 17.
Staying true to itself, the government again modified the privatisation strategy on September 29, saying that the strategic investor could only submit bids for a majority stake of 61.8825% in BCR, dropping the option of 50% plus one share. Most banks in the race had anyway expressed their intention publicly of bidding for the maximum stake.
The 61.8825% stake will be made up of the 36.8825% minus two shares currently held by the State Assets Resolution Authority (AVAS) in addition to the 25% plus two shares acquired by EBRD and IFC after the state exercises its repurchase option.
The government decision says that the sale price per share in the case of the controlling interests cannot be lower than the price paid for repurchasing the shares from EBRD and IFC.
At the same time, BCR''s privatisation commission decided that the price offered by investors would account for 90% of the final score used in differentiating bidders.
With ABN Amro having dropped out of the race, the remaining contenders are Fortis, Banco Comercial Portugues, the National Bank of Greece, Banca Intesa, Deutsche Bank, Erste Bank, Dexia, KBC and BNP Paribas.
Since the start of the privatisation process, the government had said it wanted to get the highest price possible for the controlling interests in BCR. On the other hand, several investors have said publicly that they expect other factors - such as international reputation, experience and prospects - to count besides price, hinting that they were not intending to spend too much money to get control of the largest Romanian bank.
At any rate, the clash ahead looks set to be a fierce one, particularly since the suitors include smaller banks that are very determined to enter the market.
razvan.voican@zf.ro
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