AGEAS (BUY, €3.1): MCS – Court provides two month cool off period

For further information contact analyst: Albert Ploegh, Amsterdam (31) 20 563 8748

·       The Dutch State has disputed the 2bn claim from Ageas related to the mandatory convertible securities (MCS) in the Amsterdam Court (December 8). Without hearing Ageas the Amsterdam Court ruled in favour of ABN Amro that it is not allowed to issue new shares for a period a two months. Normally, such a cool off period is only two weeks. The longer period is granted to make it possible to find an amicable solution between The Dutch State (ABN Amro) and Ageas on all outstanding disputes according to the spokesman of the Dutch Ministry of Finance. Ageas has already a legal appeal pending against the Dutch State in relation to so-called preference shares of 0.4bn and at an earlier stage the Dutch State already threatened to file counter claims against Ageas in total of 275m if Ageas starts a legal proceeding against the Dutch State in relation to the MCS instrument.

·       Ageas holds ABN Amro liable to pay 2bn in relation to the MCS. The MCS converted into ordinary shares on December 7 (4% dilution). Based on the original agreement this payment needs to be settled by an issue of shares of ABN Amro. Thus, Ageas could theoretically become a minority shareholder in ABN Amro, which clearly is not preferred by the Dutch State as this would complicate a sale or IPO of ABN Amro at a later stage. This is also the reason of the proceeding by the Dutch State to block this option. Ageas mentioned earlier this week that is will initiate a legal proceeding against ABN Amro (basically the Dutch State) if it fails to deliver the shares.

·       With the many legacy issues outstanding the equity story of Ageas is already complex enough. As such we hope that a settlement can still be reached. In addition, the conversion might create an overhang of Ageas shares as the holders of the MCS might want to exit. That said, with the share trading at 50% to book value (partly driven by peripheral sovereign debt worries) we believe this is more than reflected in the share price.


11:13 Écrit par swingteam-cc | Lien permanent | Commentaires (0) |  Facebook |

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