ECONOMY

Societe Generale edging out General Bank tender rivals

French bank group Societe Generale (SG) appears to be the front runner in the tender for the sale of a strategic stake in General Bank, sources say. A top-level meeting of ministers and Bank of Greece officials, chaired by Prime Minister Costas Simitis, yesterday approved plans for the part-privatization of General, the last sale of public sector assets before the general election of March 7. Formally, the winner will be approved by the Army Providence Fund, General’s main shareholder and seller of a major stake, the exact size of which is to be determined in the tender process. The fund, which is overseen by the Defense Ministry, is expected to decide on the winner next week. SG’s lead in the race appeared to be confirmed by a statement from Marfin Bank, one of the other two bidders, which seemed to accept a decision not yet formally announced. «We were informed today of an impending decision by the Army Providence Fund (MTS) that Societe Generale will be declared winner in the General Bank tender. We thank MTS for the honor of considering us as candidates in managing together the future of the bank. Societe Generale is one of the world’s largest and best banks. We wish it success in its plans, for the benefit of General Bank, its employees and the national economy,» said the statement. Sources told Kathimerini that on the purely financial side, Aspis Bank, the third contender, seems to have made the highest bid per share, but the French bid seems to be the best overall. Specifically, SG is said to have offered the lowest price among the three, about 6 euros per share for 6 million shares, or 22.3 percent of General’s share capital from the total of 38.5 percent held by MTS. The French bid differs from the other two in that it proposes the direct payment of 36 million euros, while Marfin and Aspis offer higher prices per share but for a much smaller number of shares each (about 3 million), which would amount to a smaller overall revenue for MTS – about 20 million euros. General Bank has a current market capitalization of 168 million euros. SG is also said to have proposed a share capital increase which would give it majority control and leave MTS with a 10 percent interest. According to the same sources, SG undertakes to proceed with a further capital increase if necessary, while none of the three bids raised an issue of staff cutbacks. Reactions General Bank’s union of employees denounced in a statement «the ‘caretaker’ government’s political decision for the sale to Societe Generale, which undertakes no commitments, either as regards the future of the bank or its employees.» It called for the tender process to be suspended immediately. The union also released statements by political parties on the issue. The main opposition New Democracy party said it wholly disagreed with the government’s methods «which led to the sale of General Bank for a disgraceful sum at the expense of MTS, its small investors and the national economy.» The Communist Party of Greece charged the government with unacceptable political intervention in favor of SG, «which has already indicated plans for about 600 layoffs and, as employees charge, has been involved in a money-laundering scandal. Synaspismos deputy Panayiotis Lafazanis also cited French media reports of SG’s involvement in money laundering.