On Thursday morning Fairfax Holdings announced the successful completion of the placement of a 2.2% share package in Eurobank to special investors in an express process on Wednesday evening, explaining that its partial divestment was made for technical purposes.
Prem Watsa’s investment company sold 80 million shares in the Greek lender at the price of 2.33 euros per share – i.e. at a 2.5% discount from Wednesday’s closing price of €2.39. The package went through Thursday’s bourse session, boosting turnover with more than €186 million. In a statement, Fairfax explained that the placement, run by J.P. Morgan, “represents a mandatory technical adjustment to the significant holding Fairfax has in Eurobank and in no way reflects a view about the valuation or the long-term outlook of Eurobank.”
The move came following the regulator’s advice to Fairfax to reduce its stake to just under 33% for monitoring purposes, the investor said, adding that it will remain a committed stakeholder in the lender. Fairfax has also agreed to a 180-day lock-up of the rest of its shares in Eurobank after the completion of the transaction (i.e. the obligation not to sell its stake). Eurobank sources note that holding a significant stake in a regulated banking institution has specific limits and restrictions. Therefore, the significant stake that an investor can hold is determined by the competent supervisory mechanisms and the relevant approvals it has received.