Kyknos goes to Sharelink

Investment company Kyknos, which has been the focus of a long dispute between financial services groups Sharelink and Era, is to be taken over by Sharelink. After months' of disputing and arguing, the two sides appear to have reached an agreement on the matter of Kyknos and have even gone one step further to create "the start of a broader cooperation between the two sides".

Sharelink, Era and all other interested parties were at the AGM of Kyknos Investments yesterday afternoon, but it appears that the wind of change had already started blowing from the morning, when the two sides agreed to a compromise before the District Court of Nicosia. The compromise means that Sharelink will take over Kyknos but that Era will also be "rewarded" for bowing out.

According to initial information, the agreement between the two companies provides for the granting to Era, by way of compensation for bowing out, of 38% of Kyknos, a stake similar to that owed by Era in Kyknos prior to the takeover dispute. Sharelink will have the remaining 62% of the company.

It is estimated that over £25m will change hands as a result of the deal. SFS has also announced that it would give smaller Kyknos shareholders 1 SFS share in exchange for each Kyknos share they own, resulting in a gain of 13 cents for the sellers (on June 22, SFS closed at 79,5 cents and Kyknos at 66,5 cents).

According to SFS, the group will enhance its capital base by £65m through the issue of shares as a result of the deal. The group's existing share capital amounts to 195m shares. Of the new shares, £55m will be distributed among existing shareholders of the group, while a further £10m will be used for the implementation of the deal. This means that the group doubles its capital base by issuing the equivalent of 33% of its capital in new shares.

Kyknos is expected to convene an EGM for July 30, 2001, during which the Chairmen of Sharelink and Era, Christodoulos Ellinas and Michalis Ioannides, are expected to urge small shareholders to accept the deal offered to them. SFS and Era are likely to seek permission to resume trading today.

It appears that Kyknos will not feature among listed companies for much longer. With the takeover of a majority stake by SFS, the likelihood is that Kyknos will be delisted. Two days following the voluntary suspension of trading in SFS, Kyknos and Era and eight months since the start of the "war" between the two sides, there is finally light at the end of the tunnel.

According to a top-ranking official of Sharelink who spoke to Phileleftheros, SFS are delighted at the outcome that is aimed at securing "the interests of all Kyknos shareholders and the stock market institution."

Era is also happy with the deal. "We abandon a long-drawn dispute with substantial benefits," one Era official told Phileleftheros. He added that the group would find it easier to pursue its future plans following the conclusion of this deal.

In the meantime, it has transpired that the suggestion that the two sides sit together and negotiate a deal came from Alkis Argyrides, former chairman of investors' association PASEHA.

Translated from Phileleftheros