ETBA Bank sale ‘delayed for weeks’

The government said yesterday it would seek improved bids for a majority stake in state-owned ETBA Bank from Agricultural Bank and Piraeus Bank, potentially delaying the sale for weeks. State-owned Agricultural and privately-held Piraeus were the only bidders in Greece’s attempt to sell up to 65.56 percent of its stake in ETBA. Both banks had until yesterday to improve bids submitted earlier this week. After evaluating the bids we have chosen to repeat, for one last time the submission of improved bids from the interested parties, Agricultural and Piraeus banks, said government spokesman Dimitris Reppas. A senior government official said that the new round of talks may take weeks. Some analysts saw the development as being in Piraeus’s favor, with the government seen trying to sell its stake to a private, rather than a state-controlled bank like Agricultural. Analysts have been critical of Agricultural’s effort to buy into ETBA, saying the sale of one state-owned bank to another hardly constituted a privatization. The extension is probably being given so that Piraeus can improve its offer for ETBA. Otherwise (if Agricultural’s offer is accepted), there would be doubts about the meaning of privatization, said head analyst Haralambos Papademetriou at Intersec. Agricultural Bank offered 144.9 billion drachmas ($385.9 million) in cash to buy 41.1 percent of ETBA, equivalent to 5.98 euros per share, plus 86.3 billion drachmas in convertible one-year bonds for the remaining 24.48 percent, at a conversion rate of 0.755 Agricultural shares for each ETBA share. Piraeus offered 126.8 billion drachmas for just over 50 percent of ETBA at 4.3 euros per share in cash. If the offer is accepted, Piraeus would offer to buy the remaining 15.56 percent stake on the basis of 4.17 of its shares for every 10 of ETBA.

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