ECONOMY

Societe Generale the preferred bidder for General Bank stake

The first phase of the tender to sell a large chunk of General Bank, including its management, to a bidder ended yesterday when the board of directors of the Army Fund, its major shareholder, decided, with only a single director dissenting, to choose France’s Societe Generale as the preferred bidder. «During today’s meeting, the board of directors of the Army Fund decided, on the recommendation of the financial adviser, to declare Societe Generale the preferred bidder. According to the terms of the tender, Societe Generale will be invited into negotiations in order to improve its offer,» the board announcement said. Well-informed sources said negotiations would last no more than three days and, apart from some minor legal points, will focus solely on improving the French bank’s offer, both for General Bank’s 6 million shares on offer and for the subsequent capital increase. The Army Fund’s consultants, Rothschilds, will also raise the issue of employees’ jobs. Societe Generale proposes to buy directly the 6 million shares representing a 22.3 percent stake in General Bank. The Army Fund owns a total of 38.5 percent and thus will hold on to a 16.2 percent stake. A general shareholders’ assembly will then decide on the bank’s capital increase. However, General Bank employees, which own a 6 percent stake in the bank and oppose privatization, are expected to ask for a delay. The actual amount of capital increase will be decided depending on the price paid for the shares. After the increase, Societe Generale will hold a majority stake in General Bank and the Army Fund will hold 10.45 percent. Societe Generale, if asked, may offer to buy an extra amount of shares and thus raise its stake to 65, or even 70, percent. No delisting According to the same sources, Societe Generale does not intend to rename the bank, nor does it want to delist it from the Athens Stock Exchange. It mentions in its offer that «our goal is to turn General Bank into a leading component of our network in SE Europe.» Societe Generale also declared that it intends to invest over 100 million euros during its first two years of ownership in order to expand the bank’s network and train personnel. It adds that spending on personnel training under its ownership will increase 900 percent. It also plans to build a business planning center in Thessaloniki to facilitate its plans to expand into the Balkans. Societe Generale is France’s third largest bank and the sixth largest in Europe. Its capitalization exceeds 30 billion euros, close to the Greek banks’ total of 35 billion. It manages mutual funds worth a total of 3,000 billion euros and its total assets exceed 500 billion. As part of its human resources policy, Societe Generale will give General Bank’s employees the opportunity to acquire Societe Generale shares at a discount. Societe bank employees, with a 13 percent stake, form the largest single block of shareholders. more than 90 percent of all employees hold shares in the bank. (Greek banks Marfin and Aspis were also bidding for General Bank, offering 7 euros per share and 6.60 euros, respectively. Societe Generale reportedly offered 6 euros per share.)