Higher bid sought for Emporiki

The Greek government wants Credit Agricole to improve its offer for Emporiki Bank, Economy and Finance Minister Giorgos Alogoskoufis said yesterday, two days after rival suitor Bank of Cyprus quit the race. «There is an issue with the price. I think it must be improved in order to be accepted by the state,» Alogoskoufis told Alpha Radio, sending Emporiki shares higher. «At this moment, I am not speaking with certitude as I await the recommendations of our advisers who must assess the market facts and future trends. We must take everything into account,» he said. Emporiki is the highlight of the government’s 1.6-billion-euro privatizations agenda this year, seeking proceeds to pay down public debt, which at 107.9 percent of gross domestic product (GDP) is one of the highest in the eurozone. Greece, which holds about 40 percent in Emporiki directly and via state pension funds, is being advised by Citigroup on the sale. Analysts said the chances for an improved offer by Agricole were limited as the French bank faces no competition. But a surprise counteroffer surfacing before a July 25 deadline set by the securities watchdog could change things. «A higher price is possible as the offer of 23.50 euros a share is at the low end of the 23- to 27-euro fair value range for Emporiki, estimated by its adviser JP Morgan,» said an analyst who did not want to be named. «On the other hand, if there are no other competitive offers, chances are slim,» the analyst said. Credit Agricole, France’s largest retail bank and now the sole contender for Emporiki, is offering 23.50 euros a share, all in cash. Its offer values Emporiki, Greece’s fourth-biggest bank by assets, at 3.1 billion euros ($3.9 billion). Sudden withdrawal Bank of Cyprus, which had offered cash and stock, backed out of the procedure in a surprise move on Wednesday. Its move irked Greek officials, who were hoping for improved offers. Alogoskoufis on Thursday said the government would no longer «seriously consider its offer.» Although the Capital Market Commission, the country’s securities regulator, rejected BoC’s request to withdraw its bid, leaving it technically in force, the central bank of Cyprus yesterday rejected Bank of Cyprus’s offer to take over Greece’s Emporiki Bank. «The problem is there is now only one bidder. The government would like at least two to be able to pressure the French to raise their offer,» said analyst Elias Lazaris at Artion Securities. «If they sell to Credit Agricole as the only bidder, it will be out of necessity, sort of a last resort. Everything will be decided next Tuesday when Agricole’s chairman will be in Athens to meet with Alogoskoufis,» Lazaris said. Shares of Emporiki ended up 1.22 percent at 24.92 euros, outperforming the broader banking sector. Bank of Cyprus yesterday canceled a scheduled shareholders’ meeting on July 28 to seek approval for a capital increase for its bid for Greece’s Emporiki bank after it pulled out of the race. «As the bank’s tender offer is no longer in force, the extraordinary shareholders’ meeting on July 28 in Nicosia has no purpose and will not take place; the meeting is canceled,» BoC said in a statement.