SEB offer rejected as too low

VILNIUS (BNS) - Foreign investment funds, which hold about 10 percent of shares in Vilniaus Bankas, have united in opposition to a cash offer by the Swedish bank Skandinaviska Enskilda Banken (SEB), which, they say, is seeking to buy the profitable Lithu-anian bank for a meager price, the daily Lietuvos Rytas reported on Monday.

A week ago, SEB, which currently owns 40.8 percent of Vilniaus Bankas, announced intentions to gain full control of the Lithu-anian bank, as well as Lat-via's Unibanka and Esto-nia's Uhis-pank. SEB offered 40 litas ($10) per share in Vilniaus Bankas, which represented a premium of 40 percent over Vilniaus Bankas' closing price as of Aug. 25.

Foreign funds want SEB to pay 60 litas a share in Lithuania's largest commercial bank, according to the report.

Baltic Fund Securities director Inga Skisaker said SEB should not have based its offer on trading results on the sluggish Lithuanian stock exchange, where low trading volumes make it possible for any major investor to manipulate the price.

Vilniaus Bankas shares have been undervalued compared with SEB's bids for Unibanka and Uhispank, although Vilniaus Bankas is the best among the three banks, said Kustaa Aima, a fund manager at BBL Finland. He said he would advise against selling Vilniaus Bankas' shares at 40 litas.

SEB paid 46 litas per share in Vilniaus Bankas two years ago, when the share's book value was just over 20 litas, Aima noted. This year the book value of one share is about 38 litas, according to experts' estimates.

SEB agrees to pay 1.9 lats per share in Unibanka, which is 1.5 times above its book value.

The Swedish bank is trying to grab the last chance to buy cheaply Vilniaus Bankas shares before the bank completes the process of expenditure reduction and restructuring, which will raise its value considerably, Skisaker said. The restructuring was necessary after the takeover of Hermis, a local commercial bank.

Virgilijus Poderys, chairman of the Lithuanian Securities Commission, said it did not seem likely that SEB would acquire 100 percent of shares in Vilniaus Bankas, given the situation.