ECONOMY

Piraeus set to sell its BoC stake

NICOSIA (Reuters) – Piraeus Bank said yesterday it planned to dispose of its stake in Bank of Cyprus (BoC) in consultation with the management of the Cypriot bank. Piraeus, Greece’s fourth-largest bank, last month made a cash-and-stock takeover bid for Bank of Cyprus, Cyprus’s largest commercial bank. It was rejected, and the Greek bank is now making a bid for Marfin Popular Bank (MPB). Piraeus’s intentions regarding BoC remained friendly and the disposal would be handled in a manner to avoid pressure on BoC’s shares, bank Chairman and CEO Michael Sallas said. Piraeus owns just under 10 percent of BoC. «We will maintain our stake until we reach an understanding with them (BoC) and with their agreement to dispose of it in a placement,» Sallas said after meeting with Cyprus’s Central Bank governor, Christodoulos Christodoulou. Piraeus Bank has made an offer for at least 40 percent of MPB and is offering one of its shares for every 5.7 shares of MPB, valuing Marfin Popular at about half its market value of -6.5 billion. Piraeus submitted details of its bid to the central bank, Cyprus’s financial regulatory authority said yesterday. Cypriot central bank clearance is required since Marfin, an amalgamation of one Cypriot and two Greek banks last year, has a presence in Cyprus. The central bank has three months to decide on the bid. Dubai Investment Group, whose Dubai Financial unit holds a 17 percent stake in MPB, on Friday rejected Piraeus Bank’s offer to take over Marfin Popular. Marfin had mounted a rival bid for Piraeus and Bank of Cyprus, but they were ruled invalid last week by the Cyprus securities commission. A Marfin Popular official confirmed that the bank was seeking a legal injunction in the island’s Supreme Court, challenging the validity of the decision. Sallas refused to be drawn into details on the bid, and Piraeus’s valuation of Marfin. «The bid speaks for itself,» he said. Piraeus Bank has said a merger with MPB would create the second-largest banking group in Greece, giving rise to significant synergies, boosting deposits and loans and taking the combined network to 820 branches.