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Denizbank Falls as Sberbank Offer Said Below Market Level

Denizbank AS (DENIZ), the Turkish lender owned by Belgium’s Dexia SA (DEXB), fell after Russia’s OAO Sberbank (SBER) was said to be near buying it at a valuation of 1.5 times book value, below its current level.

The shares dropped as much as 10 percent in Istanbul before paring losses in the final half hour of trading to close down 0.3 percent at 17.75 liras.

Sberbank, based in Moscow and controlled by the Russian central bank, and Dexia may sign an “exclusivity agreement” on the sale of Denizbank as early as tonight, said two people familiar with the matter who declined to be identified because the information isn’t public. Sberbank may agree to pay as much as 1.5 times Denizbank’s book value, said one person close to the deal. The stock currently trades at 2.61 times book value, according to data compiled by Bloomberg.

Though below Denizbank’s current value, Sberbank’s offer “should be considered as positive for listed banks’ valuations” in Turkey, according to Hakan Aygun, an analyst at Ak Invest in Istanbul, the investment arm of Akbank TAS. “The price multiple reflects the Russian bank’s confidence in the Turkish banking system.”

The average price-to-book ratio for Turkish banks on the 16-member Turkish banking index is 0.94, according to data compiled by Bloomberg.

Sberbank gained 3.6 percent to 81.57 rubles in Moscow, paring yesterday’s 4.9 percent drop.

To contact the reporter on this story: Benjamin Harvey in Istanbul at bharvey11@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

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