The shareholders of the SIFs, unhappy with the offer made by "Erste"

• Erste concluded an agreement of 435 million Euros for 24% of BCR, after paying 3.75 billion Euros in 2006, for 61.88% of the shares of the bank

• Cătălin Chelu: "The price offered by Erste to the SIFs is ridiculous"

The Austrians of "Erste Group" (symbol:EBS) have announced that they have signed a principle agreement with four of the five financial investment companies (SIFs) in order to buy their 24.12% stake in BCR in a deal worth 435 million Euros, based on the September 12th price of 20.43/Euros for one EBS share. Erste made an agreement with SIF Banat-Crişana, Oltenia, Muntenia and Transilvania to offer them EBS shares in exchange for their 2.06 billion shares in BCR (at a ratio of 1 to 127.95), to pay 1.0385 lei/share for 424.19 million shares in BCR and to pay 0.1 lei for a maximum of 133.67 million shares of BCR issued in 2011 in exchange for last year"s dividends.

The 435 million Euros which the Austrians of Erste are offering to the four SIFs would put the value of BCR at about 1.8 billion Euros, even though in 2006, Erste paid approximately 3.75 billion Euros for 61.88% of the shares of the bank. The difference between the price of 2006 and the current offer made to the SIFs, as well as the promise made by Erste that it would buy back the shares of BCR from the bank"s employees at a better price than the one which the SIFs are offered, made some of the shareholders of the SIFs unhappy.

Radu Hanga, the general manager of BT Asset Management, one of the shareholders which requested the summoning of General Shareholder Meetings by the SIFs in order to have them begin the procedures for taking BCR public, said:

"For me as a shareholder of the SIFs, it is frustrating that the deal between EBS and the SIFs, is valued at a price/book value of 1.26x (1.07x if we adjust by the current market price of ERSTE), whereas BCR employees are being offered for their shares a price calculated by multiplying the book value per share of BCR with a number calculated by dividing the market value of BRD-SOC GEN by its book value, plus a 50% premium.

In other words, the other minority shareholders of BCR are offered a price that is nearly double what the SIFs are getting, a discrepancy which I can"t explain".

Mr. Hanga said that it is too early to announce how he would vote in the General Shareholder Meetings of the SIFs scheduled to take place a few days from now, as he doesn"t yet have a final position on this subject.

Cătălin Chelu, known as one of the most active investors in the SIFs, considers that the price offered by Erste to the SIFs is "ridiculous", considering that over the last six years BCR has consolidated its operations. Businessman Cătălin Chelu claims that such a deal between Erste and the SIFs would be against the interests of the shareholders of the SIFs: "I find it stupid to get 600 million Euros for 30% of BCR, after the bank stabilized over the past few years. The price is ridiculous, considering that Erste wants to pay about 100 million Euros for 6% of BCR, now, after we"ve passed the worst of the economic crisis. Such a deal goes against the interests of the shareholders of the SIFs, perhaps their managers hope that in doing that they will succeed in getting a cash injection, but who knows how long that is going to last as well... If it were up to me, it would be better if the SIFs didn"t sell BCR ....I am terrified at what the SIFs will do with that kind of cash. I will vote against such a deal at the General Shareholder Meeting and I will challenge it in court if it gets done".

Eugen Voicu, of Certinvest, considers that the offering of the people of Erste is "worthy of consideration", even though he would have preferred seeing the bank taken public. "Certinvest" is also one of the shareholders which requested the convening of the General Shareholder Meeting at the SIFs in order to request the beginning of the listing of BCR.

Mr. Voicu said: "I definitely would have liked having BCR listed, but given the domestic and international market conditions, I think that the alternative suggested by Erste could work.

Overall it is rather fair, and worthy of consideration. The fact that the BCR employees are being offered a better price for their shares than the one that the SIFs are getting is an international practice when making this kind of deals, it"s nothing new. At the moment, it is a good alternative which we are inclined to approve in our General Shareholder Meeting".

The agreement between Erste and the four SIFs also stipulates that the financial investment companies will forfeit the right to request the listing of BCR as well as any special rights to earn dividends.