Yapi Kredi Sigorta AS (YKSGR) was set for the steepest drop in more than a decade after parent Yapi & Kredi (YKBNK) Bankasi AS agreed to sell the insurer to Allianz SE for less than yesterday’s closing price.
The shares of Yapi Kredi Sigorta tumbled 17 percent, poised for the biggest retreat since June 2002, to 17.95 liras at 3:28 p.m. in Istanbul. About 275,000 shares traded, 4.3 times the stock’s three-month average daily volume, according to data compiled by Bloomberg. Yapi & Kredi, the parent co-owned by UniCredit SpA (UCG), lost 1.1 percent. The Istanbul Stock Exchange National 100 (XU100) index dropped 0.5 percent.
“This deal implies a price of 18.68 liras a share for Yapi Kredi Sigorta,” Hasan Demir, an analyst at Tera Brokers in Istanbul, said by phone. “The stock had been rising for a long time on expectations of a sale – so some investors may also be realizing profits.”
Allianz (ALV) will purchase 94 percent of the insurer from Yapi & Kredi, including the life insurance and pensions unit Yapi Kredi Emeklilik AS, for 1.79 billion liras ($983 million), Yapi & Kredi said in a statement on its website. The lender will then buy back a 20 percent stake in the pensions unit for 188 million liras. The sale is expected to boost Yapi & Kredi’s capital adequacy ratio to 17.1 percent from 16.3 percent at the end of 2012, the bank said.
Assuming that a mandatory tender offer by Allianz for the listed 6.1 percent of the company won’t be below 18.68 liras a share, the level reached after today’s drop is “reasonable,” Demir said. Allianz said it will conduct a mandatory offer for remaining stock after the transaction is complete.