Business deals brewing everywhere

The reawakening of the Athens Stock Exchange over the past two-and-a-half months has brought rumors of impending business deals to the fore. In recent weeks, most deal rumors concerned the banking sector, since banks have often positively surprised us, creating great expectations. However, it seems that the deals currently brewing are to be found everywhere but in banks, which are moving slowly to deal with pending financial issues. In other sectors, we have a lot of movement. According to well-informed sources, we have at least 10-12 big business deals being readied, mostly having to do with mergers, acquisitions and strategic partnerships. Most of the companies which have already hired consultants to explore possibilities of a deal are Athens bourse heavyweights, whose main shareholders are either looking to sell a majority of their holdings or to find a strategic partner. The same sources mention that multinationals have expressed interest in such deals for some time. Besides these dozen, whose chances of clinching a deal are quite high, another 30 listed companies – all among the top 100, by capitalization – have brought in consultants to study restructuring possibilities. Among the alternatives proposed, a merger or acquisition is always on the cards, provided the shareholders are convinced to take the step. Aquaculture firms provide a sorry example of shareholder recalcitrance. Market experts speak of shareholder «arrogance,» wrong business moves and destructive competition that may send the whole sector onto the rocks. «As a result of the competition among them, they end up selling their produce to Italian wholesalers at one-tenth of the domestic retail price. They thus miss out on the domestic market as well as on their chances to establish themselves internationally,» a market expert says. Another situation often observed in Greek enterprises is family ownership structure and the problems associated with succession. Such structure may lead to forced sales in order to ensure the survival of the company. A recent example was the longstanding tobacco firm Papastratos, where 40 shareholders, descendants of the original founders, four brothers, sold 74 percent of the company to Phillip Morris. When the family expands so much, there is always the danger of the dilution of shareholding and managerial control. There are many such listed companies, you only have to look at their shareholders’ lists, says a well-known banker. Everything, he says, depends on timing. The shareholders must choose the right moment to sell in order to maximize their own profit and the company’s benefits. The role of the State Private sector deals and partnerships may help improve the business climate, but the government plays a preponderant role, as it remains the main shareholder in many of the most important enterprises. The Hellenic Petroleum-Petrola Hellas agreement was a political decision. What will happen to the National Bank shares from the share-exchangeable certificate that expires next month; the fate of the Postal Savings Bank; the sale of another share in Emporiki Bank, the Public Gas Corporation and others; in other words, the most interesting deals are a matter of politics. Selling the Postal Savings Bank is one of the biggest challenges, and not just for the banking sector. There are many suitors. One of them is the Latsis group. However, its involvement in the deal with Hellenic Petroleum is causing second thoughts. The proposed solution, a merger with Attica Bank, will not be as controversial. What matters, both in the private and public sector, is making viable, transparent and serious solutions that will benefit both the shareholders and employees. Otherwise, we will be led to botched deals and yet another stock market bubble.

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