Piraeus’ major shareholder John Paulson sold a 15% stake of his total investment in the bank for 160 million euros, according to a bank announcement.
Specifically, the US investor, one of the longest-serving in the domestic banking system, placed 2.8% on the market, maintaining the remaining 15.8%. He announced that he remains “a long-term shareholder and will participate in the development and enhancement of the value of Piraeus”, stating that his company, Paulson & co. Inc., is “immensely impressed by the performance of the bank and its management.”
He explained that the sale transaction of 35 million shares in the Greek systemic bank, was due to the rebalancing of Paulson’s portfolio. The shares were offered through an accelerated book building process at a price of 4.58 euros per share. As a result, Piraeus’ share came under strong pressure on the stock exchange, recording losses of 3.97%, to 4.520 euros.
Pressure on the share
Despite the temporary pressure on the share price, market sources estimated that the sale of a significant percentage by the major shareholder of Piraeus is a profit-locking move and favors the bank’s free float. John Paulson began his investments in the bank in 2013, participating in the subsequent share capital increases with funds of 680 million euros.
Of these, 265 million euros were channelled to the last share capital increase of Piraeus, in 2021. Paulson has systematically invested in Piraeus Bank since 2013, participating in successive rounds of recapitalizations.
After raising 160 million euros, the average cost is set at around 500-550 million euros, that is, an amount less than 3 euros/share. This means that the current value of Paulson’s portfolio in Piraeus has offered a return of +50%. In fact, we must take into account that the US investor expects to receive his share of the upcoming dividend of 373 million euros, which will further lower the acquisition cost and improve the return on the investment.
