Preliminary talks between First Abu Dhabi Bank PJSC (FAB) and Koç Holding to buy a controlling stake in Yapi Kredi Bankasi A.S. have stalled over the price, Bloomberg has learnt from sources close to the matter.
Sources told Bloomberg that FAB opposes the valuation of Yapı Kredi and that Koç Holding, the majority shareholder of the bank, wants a higher price than FAB is currently willing to offer.
The sources said that due to this disagreement, FAB has not yet officially started the ‘due diligence’ process after weeks of negotiations, and that both sides have not hired consultants but are continuing negotiations.
The news was first reported by Reuters. Reuters reported that FAB was in negotiations to buy the 61.2% stake of Koç in Yapı Kredi for around $8bn. This implies a total market capitalisation of over $13 billion and a price-to-book value much higher than other banks traded on Borsa Istanbul.
According to Bloomberg’s calculation, the book value is $5.6 billion. After its shares increased by 10 per cent following the news of the talks, Yapı Kredi’s value corresponded to $ 10 billion. According to Bloomberg calculations, the bank’s book value is $5.6 billion.
While it was not stated at the first stage how much FAB was ready to pay for Yapı Kredi shares, a representative of the bank did not comment to Bloomberg on the issue.
Bloomberg News first reported in April that FAB wanted to buy Yapı Kredi shares. In the said news, which was based on sources close to the subject, it was noted that FAB was in talks for a potential share purchase from Yapı Kredi and that the talks were at an early stage. The sources also stated that FAB, the largest bank in the UAE, was in talks with the owners of more than one bank in Turkey.
Following the news, Koç Holding made a statement to KAP that preliminary negotiations on the sale of its shares in its subsidiary Yapı Kredi were continuing.
In a statement regarding the alleged sale of 61.2 per cent of Yapı Kredi for USD 8 billion, Koç Holding said, ‘As a holding company, negotiations can be held with the relevant parties in order to evaluate the alternatives that may come to the agenda regarding our portfolio.’
Koç Holding reported that preliminary negotiations on the sale of its shares in its subsidiary Yapı Kredi are ongoing, but there is no development that requires a public disclosure.
In the statement made to PDP, ‘There have been news in the press and media organs that the negotiations for the sale of the shares we own in our subsidiary Yapı ve Kredi Bankası A.Ş. (YKB) have reached the final stage. As it is known, as a holding company, negotiations can be held with the relevant parties in order to evaluate the alternatives that may come to the agenda regarding our portfolio. Although preliminary negotiations of a similar nature are ongoing in relation to the issue reflected in the media, there is no development that would require a public disclosure within the scope of the Capital Markets Board’s II-15.1 Communiqué on Material Events. This statement has been made upon inquiries from our investors.’
Reuters, citing unnamed sources, reported that First Abu Dhabi Bank was in advanced talks to buy the 61.2 per cent Koç Group stake in Yapı Kredi for about $8 billion.
Sources said the final details of a potential deal were being finalised after months of negotiations. Koç is seeking about $8.5 billion for its stake in Yapi Kredi and First Abu Dhabi Bank has offered about $7.5 billion, one of the sources said.
Source: BloombergHT Turkish
Translation: Cem Cetinguc