Open bank warfare

The Greek banking sector yesterday witnessed a rare, if not unprecedented, war of words and rival bids, involving the banks of Piraeus, Marfin Popular (MPB) and Cyprus, which were all rejected. Piraeus and MPB launched rival tenders to buy each other out, prompting the Athens bourse to halt trade in both. MPB, the recent product of the merger involving banks Marfin, Egnatia and Cyprus’s Laiki, made a public offer to buy Piraeus Bank and the Bank of Cyprus (BoC), after an earlier offer by Piraeus for MRB late on Thursday. MPB, which has a market value of 6.9 billion euros, offered to buy Piraeus and Cyprus shares at their closing prices, 25.52 euros and 11.14 euros respectively. Piraeus, Greece’s fourth-largest lender with a market value of 6.8 billion euros, offered one of its shares for every 5.7 shares of Marfin, effectively valuing it at 4.48 euros a share, a 50 percent discount to Thursday’s closing price. Market watchers said Piraeus’s tender, to buy 40 to 100 percent of MRB, was a defensive, preemptive move to block an imminent bid by Marfin for Piraeus and BoC, which is about 10 percent owned by Piraeus. Piraeus said that under Greek law, a company that launches a public offer cannot at the same time become a buyout target, and that therefore, MPB’s offers were illegal. In Nicosia, the board of BoC rejected MPB’s bid. «BoC’s board considered that the intention of Marfin Popular lacks seriousness. It comes from an organization that resulted from the merger of three financial institutions, the activities of which have not yet been operationally merged,» the board said in a statement. MPB charged in a statement that Piraeus’s offer was intended «to obstruct or goad the judgement of shareholders and the market» and that Piraeus Bank President Michalis Sallas had made improper use of confidential information which had been provided to him out of courtesy and in line with the code of conduct. Sallas denied the claim, saying that MPB had not officially provided notification of its intention to buy out Piraeus. «Any intention would have been serious only if had been specific, detailing the aim of the acquisition and the basic terms,» he said. «The developments set up complex legal issues that will be cleared up by the Capital Markets Commission,» said Athens brokerage P&K Securities in a note. (Kathimerini, Reuters)

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