The over 8,000 employees of BCR that decided to trade six BCR shares for one Erste Bank share are now finding that instead of the substantial gain they would have made if they had initially sold their interest on the stock market, they would lose money today.
The reason: the same financial turmoil originating from the US, which also hit the Bucharest Stock Exchange as well as the RON, and caused Erste share price to drop from 58 euros in October to 44-48 euros at present.
The new Romanian shareholders were prohibited from selling their shares for a year from the swap. The ban expires on December 22 for all shareholders.
The price of an Erste share fluctuated between 47 and 48 euros yesterday afternoon, so that a BCR employee potentially strapped for cash would get a minimal profit on the 45.90 euro value at which the exchange was conducted a year ago. Erste promised that within one year from the swap it would also float on the Bucharest Stock Exchange to facilitate the sale of investments for BCR employees. They should deliver on their promise in January, sources close to the operation say.
On November 24, 2006, when the offer Erste made to BCR shareholders expired, the price of an Erste share was worth around 54 euros. It later increased rapidly to 60 euros, and fluctuated around this threshold until mid summer, when abrupt adjustments started to occur, which led to a reduction to 51 euros, followed by rebounds.
It was as late as November 15, when at the height of the turmoil caused by international suspicions about the extent of the losses incurred by the banking industry throughout the world due to the US crisis, the price fell below 50 euros for the first time.
As a result, the market capitalisation of Erste fell by more than 3.1 billion euros compared with the end of 2006.
The analysts of Swiss bank UBS were recommending
