Just over two weeks ago, Hannes Smárason, Executive Chairman of aviation and travel services company FL Group, dismissed reports that he was planning to buy a stake in Íslandsbanki as "rubbish".
Today, both Morgunblaðið and Iceland State Radio, RÚV, report that Hannes, together with retail and media mogul Jón Ásgeir Jóhannesson, CEO of investment company Baugur Group, has purchased a 5.3 per cent share of Íslandsbanki for 9.5 billion Icelandic króna.
In an interesting twist in the world of Icelandic business, Hannes is now working on several fronts with Jón Ásgeir, the main competitor of his former father in law, Jón Helgi Guðmundsson of retail company Norvik. As widely covered in the Icelandic media, Jón Helgi and his daughter, Hannes's former wife, Steinunn Jónsdóttir, recently sold a significant part of their collective holdings in Íslandsbanki. According to a report in Morgunblaðið on June 11, Steinunn sold her shares to investment company Burðarás in order to thwart the designs that her former husband had on the bank where she serves as a non-executive director.
(See Iceland Review, Daily News, June 9, "Changes at the helm of Íslandsbanki?"; and June 10 "Deadlock at Íslandsbanki?")
According to the same June 11 report in Morgunblaðið, Landsbanki and affiliated parties, including Burðarás and Straumur, have had their eyes set on Íslandsbanki, not with the intention of merging it with Landsbanki as many have speculated, but merely in order to replace the existing management with a new crew more favorably disposed to "cooperating" with Landsbanki.
But what could the new raiders, Hannes Smárason and Jón Ásgeir Jóhannesson, have in mind?
In a recent interview with the BBC, Jón Ásgeir says when it comes to "the big fish" he is "looking for companies with a big asset base to finance a big transaction." "You need quite a strong asset base and there is opportunity to play the asset base better," he said to the BBC, "doing that quite quickly you can pay off your debt."
In addition, he extols the benefits of having close relationships with banks. He specifically mentions the fact that one bank is a large shareholder of Baugur.
According to the BBC, his "prime philosophy" is to "keep it simple", and he applies a one page, color-coded, cash-focused management practice with a 6 month time horizon.
Jón Ásgeir is not a passive investor. "If I would own 20 per cent of a company in Iceland," he said "I would for sure have my people on board...if you own something...big stake in something... you better take care of it."
When the BBC asked Jón Ásgeir if the group of "young entrepreneurs" in Iceland was "closely linked," he replied, "it's a small country where everyone knows each other...the invasion companies we call companies that have gone abroad and bought other companies...it's only about 9-10 people behind them."
Former McKinsey consultant, former Chairman of Norvik and ex-Chief Business Officer of deCode Genetics, Hannes Smárason is more shy when it comes to talking about his business practices. When asked by the German daily Handelsblatt last month where he got his start-capital, Hannes "rocked in his executive chair, took a sip of Coke" and then replied "Iceland offers many opportunities."