OPAP share offer is a big success

The Greek state has put into its coffers 1.268 billion euros from the successful fourth sale of a 16.44 percent stake in betting company OPAP, Europe’s largest firm in the games-of-chance sector. This amount represents the highest ever earned from a single placement of formerly state-owned shares and represents about 80 percent of the government’s projected revenues from privatizations this year. Alpha Finance, EFG Telesis Finance, National Bank, Emporiki Bank, Citigroup, Credit Suisse First Boston, Deutsche Bank and Morgan Stanley were the bookrunners for the offering. «The sale of a 16.44 percent stake in OPAP, which was the main effort of the privatization program for 2005, was completed. It was a great success,» Economy and Finance Minister Giorgos Alogoskoufis told reporters yesterday. «This selloff provides a significant boost to the structural reforms pursued by the government and proves the trust both Greek and foreign investors have in the government’s economic policy. At the same time, this is an important step toward a reduction in public debt. The government will continue implementing its program of structural reforms and privatization with determination, aiming for more growth, employment and social cohesion,» he added. High demand The sale of 52.45 million shares was oversubscribed about 3.78 times, as total bids made in Greece and abroad by institutional and retail investors were for 198,128,007 shares. The combined offering consisted of an international placement of 31,641,500 shares, a Greek public offering of 20,658,500 shares (80 percent to retail investors and 20 percent to institutionals) and an employee offering of 150,000 shares at a discount price of 21.73 euros per share. The settlement price, 24.14 euros per share, was at the upper end of the marketing range of 22.0 to 25.20 euros and in line with the price indicated to Reuters on Sunday by a source close to the deal. «The fact that the public offering was set at the high end of the price range is fueling investor interest in the stock,» said an analyst, who declined to be named. Institutional investors, both foreign and Greek, bid for 168,116,737 shares, covering the offer 4.7 times. Retail investors bid for 30,011,270 shares, covering the offer 1.82 times. Total domestic demand for OPAP shares was 59,182,411 shares. The greatest demand came through the EFG Eurobank group (25.7 percent and 27.5 percent allocated shares), followed by the National Bank group (20.6 percent demanded, 20.2 percent allocated). Among institutionals, Emporiki Bank was slightly ahead of Eurobank (21.5 to 21.2 percent), although the latter was allocated more shares. EFG Eurobank was also the top choice for retail investors, getting 30 percent of retailers’ total applications and 29.4 percent of total allocation. More selloffs ahead The government is considering divestments in Emporiki Bank and ATE Bank (formerly known as Agricultural Bank) this year to meet a 1.6-billion-euro privatizations revenue goal to pay down public debt, a senior Finance Ministry source said yesterday. «We can sell 10 percent of ATE Bank in the autumn, as well as a stake in Emporiki Bank this year. In the case of Emporiki, we have to wait for the bank’s rights issue to be completed first,» the source said. Emporiki, the country’s fourth-largest lender and 11-percent owned by France’s Credit Agricole, is planning a 400- to 500-million-euro rights issue to boost its equity and capital adequacy ratios, which were hurt by liabilities in its employees’ main and auxiliary pension funds. The sale of 10 percent in ATE Bank could fetch about 250-300 million euros, based on recent estimates by its deputy governor. Greece holds an 85 percent stake in ATE Bank. The government is trying to cut its budget deficit to below the European Union’s 3.0 percent cap by 2006 from 6.7 percent in 2004. It is also counting on proceeds from state divestments to reduce public debt, which at 110.5 percent of gross domestic product (GDP) last year is the eurozone’s highest. Other companies on Greece’s state divestments agenda include the Postal Savings Bank (TT) and the Athens International Airport (AIA). Both are headed for Athens Stock Exchange listings in 2006. The state owns 55 percent of Athens airport, with German construction group Hochtief holding 39.8 percent. «We are holding talks with Hochtief and, as soon as these are completed, procedures to float AIA will begin,» said Loukas Papazoglou, the state’s general secretary for privatizations. (Kathimerini/Reuters)

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