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PRAGUE, June 22 (Reuters) - Shareholders in Czech lender MONETA Money Bank on Tuesday rejected a share issue that would have given its biggest investor, PPF, a controlling stake and would have helped pay for a proposed $1.2 billion acquisition of PPF’s Czech lending assets.
The rejection came after shareholders had approved also on Tuesday the proposed acquisition of Air Bank and related companies from PPF, the biggest Czech investment group that was started by late billionaire Petr Kellner.
It is a blow to the second attempt by the two groups at a tie-up to boost MONETA’s position, now the sixth largest lender in a domestic banking market dominated by foreign owners.
MONETA’s chief said a deal was still a goal.
“(This vote) means financing of the acquisition of the Air Bank group was not approved,” MONETA Chief Executive Tomas Spurny said. “However, we believe we will soon find a way to get the necessary support and complete the transaction.”
In the first of two votes, the bank’s general meeting backed plans to buy Air Bank, along with the Czech and Slovak units of global consumer lender Home Credit and peer-to-peer lender Benxy, for a price of 25.9 billion crowns ($1.2 billion).
This was supported by 61.9% of present shareholders.
But in a vote on issuing 291.4 million new shares at 80 crowns per share, subscribed to PPF, only 61.7% backed the proposal, short of a 75% threshold.
Proceeds from the proposed issuance was to help pay for the acquisition. PPF would have increased its stake to 55.4% in the process, from a 29.9% stake built up this year, diluting other shareholders.
Fund group Petrus Advisers, which says it holds a more than 5% stake in MONETA, making it the second-biggest shareholder, said the deal undervalued MONETA. Investor advisory firms Glass Lewis and Institutional Shareholder Services had also deemed the price high.
PPF, with assets of almost 40 billion euros across Europe and Asia, said approval of the acquisition “confirmed that most existing Moneta shareholders support the plan.”
The combined entity, aimed at becoming a champion in retail and small-business lending, would boast 2.4 million customers, around a quarter of the population, more than the third-largest bank Komercni Banka.
A previous attempt at a deal by PPF - whose found Kellner died in a helicopter crash in Alaska in March - fizzled in 2019 when MONETA sought a lower valuation of Air Bank.
Shares in MONETA traded down 0.5% on the day at 79.40 crowns by late afternoon.
($1 = 21.4890 Czech crowns)
Reporting by Jason Hovet; Editing by David Goodman and Edmund Blair