Gov’t expects competition for Emporiki to heat up

The government yesterday left all options open regarding the bidding procedure for the privatization of Emporiki Bank, one day after Credit Agricole’s unexpected foray with a public offer for 100 percent of Greece’s fourth-largest lender. «The government will give equally serious consideration to any other rival offer for Emporiki,» Economy and Finance Minister Giorgos Alogoskoufis told reporters. Today he is meeting with representatives of the privatization’s adviser, Citigroup, for a preliminary assessment of the 23.50-euro-per-share, or 3.1-billion-euro, offer. The official launching of the bidding procedure for Emporiki is projected for the end of the month, after the issuing of the prospectus of the French bank’s offer. A draft of the document is now being considered by the Capital Market Commission. The timetable allows the prospective bidders to keep their cards close to their chests until the penultimate week of July, or seven days before Credit Agricole’s (CA) offer expires. The possible foreign suitors, besides CA, include Portugal’s Millenium BCP group, which already has a presence in Greece through Nova Bank and, according to sources, wishes to expand it. The domestic suitors include Emporiki’s rivals, Alpha, Eurobank and Piraeus, for each of which a merger with Emporiki could confer synergies and benefits of varying degrees. Yesterday, representatives of CA briefed Bank of Greece Governor Nicholas Garganas on their plans for Emporiki. A separate meeting with union representatives, produced little. In statements to reporters later, the unionists insisted that Emporiki should remain under public control. Alogoskoufis urged Emporiki employees «to realize that the privatization is to the benefit of the bank, its staff and the economy.» Citigroup, the privatization adviser, along with investment bank UBS, appeared to consider CA’s offer as rather low. Citigroup described it as «not demanding» in relation to valuations of similar banks. «The fair value of banks similar to Emporiki is, according to our valuation, 3.94 times the book value of 2006 (on average). Credit Agricole is offering 2.65 times the book value,» Citigroup said. It upheld its target price of 33 euros per share, with a «buy/high risk» recommendation. UBS said that Credit Agricole’s offer was appreciably lower than the estimated fair price, which it put at 37 euros, with a «buy» recommendation. In contrast, Merrill Lynch gave a target price of 25 euros, arguing that the offer included a premium of 30-40 percent in relation to the other big Greek banks.

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