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Law360 (April 28, 2020, 3:16 PM EDT) -- The Blackstone Group Inc. said Tuesday that its proposed €1.36 billion ($1.47 billion) takeover of northwestern Europe-focused bank NIBC Holding NV might be in jeopardy because of complications caused by the coronavirus pandemic.
The deal, first announced in February, would see an acquisition entity owned by Blackstone called Flora Acquisition BV buy all the shares in NIBC that are not owned by J.C. Flowers Y Co. and Reggeborgh Invest BV.
According to Blackstone, changes NIBC has since made to its planned dividend to be paid during the second half of this year means the transaction might no longer be doable. The tweaks, announced April 17, have NIBC paying shareholders a final dividend of €0.53 per ordinary share. The payment will be made during the second half of the year, provided the management and supervisory boards of NIBC determine at that time that such payment can be made "in light of the impact of COVID-19 on the business," according to a statement from Blackstone on Tuesday.
"The offeror understands the prudency that led NIBC to decide to postpone payment of the final dividend following the recommendation made by financial regulators to refrain from making dividend payments," Blackstone said. "However, neither the proposed delayed payment date (second half of 2020) nor the NIBC board's discretion as to payment of the dividend had been anticipated in the commitments in the merger protocol between NIBC and the offeror."
According to Blackstone, the firm's ability to fund the proposed acquisition of shares depends on NIBC paying the final dividend. The private equity giant said it plans to continue discussions with NIBC in order to try to come up with solutions ahead of a May 19 deadline, when the offer memorandum must be submitted to the Netherlands Authority for the Financial Markets.
"In light of the emerging widespread impact of COVID-19 and macroeconomic developments, the offeror believes there is substantial uncertainty concerning the transaction-related business plan and it continuing to be a realistic basis for obtaining regulatory clearance for the transaction," Blackstone said.
The firm admitted regulators have not yet indicated whether or not they are likely to clear the deal. The companies will only have "full clarity" on that point once Blackstone has made its formal filings.
NIBC serves about 600 middle market businesses and upward of 400,000 retail clients, according to its website.
A representative for NIBC did not immediately respond to a request for comment Tuesday.
Counsel information was not immediately available Tuesday.
--Editing by Stephen Berg.
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