The private equity firm is poised to secure nearly €1.7 billion from just two key investments—Hellenic Healthcare Group and Ethniki Insurance—while still holding stakes in both, ensuring continued revenue streams.
CVC recently sold 55% of Hellenic Healthcare Group to UAE-based PureHealth Holding PJSC for €1.21 billion and is now selling its 70% stake in Ethniki Insurance to Piraeus Bank for €469 million. However, the real story lies in how CVC initially acquired these assets—at rock-bottom prices, leveraging debt, and recovering much of its initial investment through asset stripping.
Greece’s business and political environment played a pivotal role in CVC’s lucrative deals. In 2021, the firm initially agreed to purchase 90% of Ethniki Insurance for €505 million, valuing the company at a Price-to-Book Value (P/BV) ratio of 1.25x–1.3x. However, the final acquisition cost ended up at just €270 million, slashing the valuation to an exceptionally favorable P/BV ratio of 0.675x.
Now, Piraeus Bank is acquiring Ethniki Insurance at a far higher P/BV ratio of 1.53x, despite no fundamental changes in the company’s financial position that would justify such a premium. This represents a 126.67% increase in valuation, effectively meaning that under the deal agreed upon by Rob Lucas and Piraeus Bank CEO Christos Megalou, Ethniki Insurance is now priced at more than double what CVC paid for it just three years ago.
The deal is raising red flags among analysts and institutional investors. Piraeus Bank’s acquisition of Ethniki Insurance is expected to erode its capital position, with its Common Equity Tier 1 (CET1) ratio projected to decline by 150 basis points over the next three years. The bank’s CET1 ratio is now forecasted to drop to 14.1% in 2025, 14.9% in 2026, and 15.2% in 2027.
This decline in capital reserves is sparking concerns about Piraeus Bank’s ability to sustain strong dividend payouts in the years ahead. If Ethniki Insurance requires additional capital injections, the bank may struggle to meet its previously announced dividend distribution targets—30% in 2024, 40% in 2025, and 50% in 2026 and 2027.
