Hedge funds which will be among the largest owners of the Icelandic Arion Bank (formerly Kaupthing) and Íslandsbanki (formerly Glitnir) are allegedly having informal discussions on merging the two banks.
The headquarters of Glitnir, now Íslandsbanki, in Reykjavík. Copyright: Icelandic Photo Agency.
According to Vidskiptabladid’s sources, the funds have been efficient in buying commercial papers in the banks at high bank rates ever since the banks collapsed and have focused their claims on Kaupthing and Glitnir.
The funds have allegedly now begun buying shares in large syndicated loans for the Icelandic banks with the purpose of increasing their shares and thus being able to participate in the decision on the banks’ future.
Among hedge funds that are involved in this practice are York Partners, Eton Park and Baupost Group, Vidskiptabladid states.