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Editor in chief: Angelo Scorza
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28/08/17 09:35

Grimaldi ready to thwart Greek coup in cabotage

Piraeus Bank planning to transfer to Attica Holdings the control of Hellenic Seaways, of which the Italian company (48.5% shareholder) has long been trying to get the majority

Manuel Grimaldi has recently been worrying about the news coming from Greece that Piraeus Bank, currently holding a 40.4% participation (as well as being largest creditor of the current debt) and other HSM Hellenic Seaways Maritime's minority shareholders signed a preliminary agreement with Attica Holdings to transfer 50.3% of the major Greek shipping company's share capital.

This was a proper betrayal carried out in a very unusual time of the year to carry out this sort of businesses, also because the Neapolitan shipowner had long been trying to negotiate with all the Greek shipping group's shareholders – starting with the Athens merchant bank itself – to gain the absolute majority of the major Greek ferry company's capital (resulting from the merger between Hellas Flying Dolphins, Hellas Ferries and Saronikos Ferries in 1999), thus repeating the successful transaction carried out with the progressive acquisition of Minoan Lines' share capital, a Cretan company that was completely restored since it is fully managed by the Neapolitan shipping giant.

“We were taken unaware, also because they had told us that we would have got in contact again in September to evaluate our proposals, which were not lower than those of  Attica”, Manuel Grimaldi explained to Ship2Shore. “As a matter of fact, if the current controlling shareholders had allowed us to check some important documents, our monetary offer would have definitely be higher, not to mention that we would have paid HSM's shareholders in cash, not mainly in paper-based securities such as Attica's shares offered. However, we have been inexplicably denied access to the documents, although we hold 48.3% of HSM's stake”.

According to the Italian shipowner, the transaction carried out by the Athenian bank is suspicious and “shady”, and it will probably not go unnoticed by antitrust authorities, both Greek or European. As a matter of fact, Piraeus Bank is controlled by Vardis Vardinoyannis, who in 1989 founded the first Greek private tv channel Mega Channel, and who is also the father of the Greek shipowner Yannis Vardinoyannis, with whom Grimaldi already competed to gain market shares in Greek cabotage at the time of Minoan Lines’ bid. Therefore, it seems a sort of revenge to prevent Naples to become the “caput shipping” in the Mediterranean sea.

If said disposal transaction should succeed, in Greece there would be a concentration of power in a single large company, and this would inevitably cause the intervention of the relevant authorities to verify the non-existence of industrial cartels, thus damaging final consumers.

Attica Holdings, a subsidiary of Marfin Investment Group, already controls two of the major Greek domestic cabotage companies, also providing connections between Italy and Greece – Superfast Ferries and Blue Star Ferries (former Strintzis Line) – and it is also an affiliate, through tonnage long-term rental, of a third Greek big player, i.e. Anek Lines, which is also providing shipping services across the Adriatic Sea.

Moreover, considering Grimaldi's 48.3% participation in HSM – of which the latter does not intend to dispose of unless it receives sensational but equally unlikely offers – with its presence in Greece through Minoan, the monopoly in the Mediterranean would be almost total, thus unsustainable to be accepted by any antitrust authority. This is the argument that Grimaldi's lawyers will submit to the relevant authorities both in Athens and Brussels.

The preliminary agreement formalised in mid-August provides for the payment of 30.61 million Euro and for Attica Holdings group's capital increase through the issue of 24.1 million new shares to acquire 39.0 million shares of the shipping company to take over.

On the contrary, if this unexpected merger should be successful, Attica Group would expand significantly in the Mediterranean, as last year it started the AML Africa Morocco Link joint-venture with a Moroccan partner.

For now, Attica Holdings has already obtained 1,250,000 HSM's shares, and for the remaining stake  owned by Piraeus Bank (37,789,833 shares) it is waiting for the green light from Greek supervisory authorities in order to sign a final take-over agreement.

As will be recalled, MIG includes the American investment fund Fortress, that in 2014 acquired Attica's 100 million dollar non-marketable debt.

 

Untenable position for the free market, the appeal to Antitrust authorities is on track

Manuel Grimaldi: “I won't be part of this Greek ‘mess’! A total cartel on cabotage such as the one that would result from this transaction is surely a matter of true European interest”

 

Manuel Grimaldi is not going to accept the plan that Greeks are trying to carry out.

As the Neapolitan company's investment is the greatest Italian investment in Greece, Grimaldi has already asked the Italian government to examine the matter. “This is ridiculous. Through a French merchant bank, they tried for two years to find the best buyer, and in their two attempts the best offer was always that of Minoan-Grimaldi.

This shows a very anti-European sentiment, worse than Macron in the France-STX-Fincantieri issue! First they prevented us from consulting key documents, although after having consulted them we could have offered even more, and then in mid-August they played the dirtiest trick ever...”, the shipowner bluntly declared.

“First of all, they were ordered to dispose of their shares but, though being the major lenders, they sold their shares to a company they already own, therefore it is as if they sold them to themselves. As a matter of fact, MIG is controlled by Piraeus Bank, and not by Fortress, which is a bondholder and it is not even Greek.

The issue of concentration – that I am well acquainted with, as some 20 years ago I was a member of the Wisemen Committee organised by Karel Van Miert, who at that time was EU Commissioner for Competition, to avoid said situations – is a very delicate issue. We are talking about Blue Star Ferries and Hellenic Seaways, i.e. the first and second Greek domestic operators, and this alone should be regarded as a great harm for the market price by Greek antitrust authorities. 

On the other hand, Minoan – that would have offered more, and also in cash, not in shares – would be the perfect solution to protect consumers' interests, also since it operates international transports.

There is already a sort of tacit cartel as Anek charters the vessels used by Superfast between Italy and Greece but, most importantly, Greek supervisory authorities should declare that this deal is “not possible” because Grimaldi is a 48% shareholder, and we are the world's major ro-ro and ro-pax shipowner, therefore the deal in HSM would extend to all Med cabotage”.

This is basically the same situation as that of Tirrenia at the time of the privatization suggested to the Grimaldi-Aponte-Onorato trio: only one of them could have purchased it, as it turned out, not the three of them together.

“Therefore, if they don't get rid of me first, they cannot buy anything in HSM!”, Grimaldi pointed out. “As a matter of fact, this issue does not regard Greece alone, but all Europe, and suspicions are arising about a total cartel I do not want to be part of. I already talked with my lawyers, who confirmed me that this matter regards all Europe. Through our participation in HSM, we would also become shareholders of everything, and this is not possible...”

Grimaldi is thus launching its counter-offensive, probably selling at a high price. “However, I believe that it is unlikely that they could find the money. They could only sell some of their businesses to me, exchanging them with my shares, but for now I am not specifying which ones (about ports as a possible way of payment, the shipowner skated over, ed.). In any case, I am willing to find a solution because I do not want to be suspected of having created such a total cartel.

There cannot be a dual management, we cannot be HSM's shareholders with Attica. They are forced to get rid of me because any possible benefit that customers might derive from this synergy, as the renown economies of scale, would be frustrated by my power of veto. Therefore, without my approval, there cannot be any merger between HSM and Attica because in order to veto all the extraordinary transactions such as mergers 33% of shares is enough (and we hold 48.5% of them)”.

Who wants to exclude the Italian company from the Greek contest?

Not Athens' government, with which Grimaldi is in contact, but apparently the mighty entrepreneur  Vardis Vardinoyannis, shipowner Vardinoyannis' uncle.

“I understand their hesitation because Minoan is still the major company for Italy-Greece trade, therefore they fear I might become the leader also in domestic transport, but they could have talked to me first... Moreover, besides investment funds, we are the only shipowners, together with a few Northern European ones, who have money to invest, but our Northern colleagues are not interested in the Aegean sea. In my opinion, Piraeus Bank's move is wrong because they could have had two cabotage giants competing, but they would rather have a single great monopolist for all national shipping. Not to mention the farce of the price they paid to themselves, which almost amounted to an internal sale because those who buy are controlled by those who sell, therefore the value is not determined by the market”.

Finally, as the Greek press already observed, it is also possible that “they did all this to sell to themselves, contrary to Brussels' requirements. Piraeus Bank wants to create a Greek domestic giant increasingly powerful and complete to offer it on sale on the market, maybe also to Grimaldi, because at the end of the day, who can buy it?”, Grimaldi concluded.

Angelo Scorza

Stampa