Bank of Cyprus tables rival bid for 100 pct of Emporiki

The Bank of Cyprus’s public offer for 100 percent of Emporiki Bank, which was submitted yesterday, represents a value of about 29 euros per share, sources said. The exact terms of the bid will become known to the public before the opening of today’s trading session at the Athens bourse today. According to the sources, only a small part of the offer to shareholders will be in cash. The biggest part will be in shares of the Bank of Cyprus itself, which, according to analysts, makes it less attractive than the rival offer by France’s Credit Agricole, which earlier this month launched a bid at 23.50 euros per share, valuing Emporiki at 3.1 billion euros. However, such a combined offer would lessen Bank of Cyprus’s capital requirements and stock market anxieties about market liquidity. Bank of Cyprus shares fell 5.71 percent on the Athens bourse yesterday. At the same time as the Cypriots were submitting their offer to the Athens Stock Exchange, Piraeus Bank announced that it was now in control of 6 percent of the Bank of Cyprus (BoC) itself, giving a further twist to developments. The announcement gave further credence to arguments that Piraeus’s acquisition of 2 percent of BoC on Monday was not an ordinary investment move, as claimed, but one with more serious ramifications. Sources said that Piraeus Bank’s share in BoC may already be as high as 10 percent. Analysts offer mixed views on developments. Some consider BoC’s offer for Emporiki is a defensive move designed to fend off a possible hostile takeover bid by Piraeus. «The market responded negatively. There are so many blanks. We don’t know why they did it or how they are going to do it,» said Calliope Toumpouri at Cyprus’s CLR, the island’s largest brokerage. Others take the view that it is the first step of a strategy for the formation of a strong group involving all three. Nevertheless, Piraeus Bank officials are denying such a scenario, insisting that there are no contacts whatsoever with BoC. Other analysts were upbeat on the benefits of the BoC bid. «We do see potential (yet to be quantified) revenue and cost synergies coming from branch overlap (closure), improved revenue generation and potentially some funding benefits,» JP Morgan wrote in a note. Earlier yesterday, a BoC delegation briefed Bank of Greece governor Nicholas Garganas, Economy and Finance Minister Giorgos Alogoskoufis, and Athens bourse president Spyros Kapralos on the bid. The government, which owns about 40 percent of Emporiki via direct and indirect stakes, has said it wants to complete Emporiki’s privatization this year. (Kathimerini, Reuters)

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