EFG Counters Doubts in BSI Acquisition

EFG International in Singapore

EFG International in Singapore

EFG International, which last week said it will buy BSI from BTG Pactual to form Switzerland's fifth-biggest private bank, released further details about the financing of the transaction.

EFG International will raise 500 million Swiss francs of fresh capital through a rights offering plus 250 million through so-called 'additional tier 1' instruments (AT1), the company said in a statement today, answering a series of questions that arose following last weeks announcement of the acquisition.

EFG will participate in the rights offering to the tune of 125 million francs and has received commitments worth a further 375 million francs from «international investment banks».

The Zurich-based private bank will pay for the rest of the purchase with 52.6 million new EFG shares and cash.

Deal Certainty Assured

In case that market conditions prevented EFG to raise the necessary capital, BTG Pactual will receive further EFG shares worth as much as 250 million francs at an issue price of 6.80 francs. It would also subscribe to new EFG AT1 capital instruments of at least 125 million francs.

«Therefore, deal certainty is assured,» EFG concluded in the statement.

According to the transaction details, BTG will be able to acquire a maximum 30 percent of EFG. The stake of EFG Group in EFG International will at most decline to 42 percent.


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