Taking advantage of BNP Paribas' product expertise and cross-selling know-how, TEB will capitalise on its recognised presence and deep knowledge of the market to further develop activities which will include, amongst others, retail, corporate and investment banking, as well as asset management and private banking, leading to significant growth prospects and synergies.
Under the terms of the agreement, BNP Paribas will pay around USD 217 million (equivalent to 2.05 times book value) for its stake in TEB Mali. This amount is subject to completion adjustments reflecting the evolution of the net assets of TEB Mali between 30 June 2004 and completion. In addition, an earn-out mechanism linked to the performance of TEB, payable in early 2008, has been agreed between the parties. The transaction will be immediately accretive for BNP Paribas.
TEB enjoys one of the highest ratings by the international agencies amongst the Turkish banks. It is the 10th largest private Turkish bank in terms of assets and a leading bank in trade finance and private banking. TEB's network comprises 87 branches and employs about 2,000 people. For the year ended 31 December 2003, TEB had revenues of USD 187 million, net income (including minorities) of USD 39 million, total assets of USD 3.0 billion, loans of USD 1.2 billion, deposits of USD 2.2 billion and shareholders' funds of USD 233 million. The RoE for 2003 was 17.6% and the total capital adequacy ratio 15.2%.
BNP Paribas will seek from the Turkish Capital Markets Board an exemption from the requirement to launch a mandatory offer for the free float of TEB and of its subsidiary Varlık Yatırım Ortaklığı A.Ş.. BNP Paribas was advised by Lehman Brothers and BNP Paribas Corporate Finance.