Dubai Financial rejects Piraeus’s bid for MPG
Dubai Financial, a subsidiary of Dubai Investment Group and a major shareholder (31.5 percent) in Marfin Investment Group, yesterday backed Marfin Popular Bank’s (MPB) hotly contested move to bid for Piraeus Bank and Bank of Cyprus, adding that it was not interested in Piraeus’s counter-bid for MPB, which valued the latter much lower than its actual capitalization on the Athens Stock Exchange (ASE). Yesterday’s ASE session was dominated by expectations of Dubai Financial’s announcement, which finally came after the close of the session. The shares of all parties involved in the bidding war (Piraeus Bank, Bank of Cyprus, Marfin Popular Bank and Marfin Investment Group) showed little movement. The ASE rally – with the main index back at levels last seen in June 2000, along with expectations of another round of consolidation in the banking sector – has fueled speculation and helped spark plenty of rumors: that Dubai Investment Group will make a bid for Piraeus Bank, that foreigners are interested in Alpha Bank, that EFG Eurobank is ready to enter the fray, and countless others. Bank managers appear highly skeptical. They note that these rumors recall the wild days of the 1999 boom and point out that such moves are not announced, much less debated publicly, before they occur. The rumors, they say, serve speculators and far from reflect business strategies. Economy and Finance Minister Giorgos Alogoskoufis felt obliged to intervene, calling on those involved in merger talks to show restraint and on investors to be careful. Still, investors await developments sooner rather than later. The key development will be the speed with which Marfin Investment Group’s capital increase will occur, through the -5 billion to be invested by Dubai Financial. Some bank managers are concerned by the fact that no date has been set for the extraordinary shareholders’ assembly that will approve the capital increase despite the fact that it was announced early last week. The announcement of the meeting must precede the meeting itself by at least 20 days. Marfin managers say it will be made very soon, confounding the skeptics. Piraeus Bank Chairman and CEO Michalis Sallas will visit Cyprus next week to push his bid for Nicosia-based (since the merger of Marfin Bank with Cyprus’s Laiki Bank) MRB. Sallas, along with two of Piraeus’s three vice chairmen, Michalis Kolakidis and Giorgos Provopoulos, will meet with Cyprus’s central bank governor Christodoulos Christodoulou, Archbishop Chrysostomos (the Church of Cyprus is a major shareholder in Bank of Cyprus), Finance Minister Michalis Sarris, Cyprus’s Capital Market Commission President George Charalambous, Nicosia Stock Exchange President Akis Kleanthous, Hellenic Bank President Andreas Panagiotou and Bank of Cyprus’s management. Kolakidis told this week an audience of portfolio managers and analysts that Piraeus’s bid for MPB has been made at the right price, since its present capitalization does not reflect its actual financial position. He added that a merger would make sense and that it would create Greece’s second-largest bank, with assets exceeding -50 billion.
