Piraeus Bank moves on Proton

Piraeus Bank, Greece’s fourth-largest lender, has agreed to buy a 26.98 percent stake in smaller peer Proton Bank in a deal likely to signal the start of a new round of takeover activity in the sector. In an all-share deal, Piraeus Bank has agreed to acquire 5.5 Proton Bank shares for every one of its own by using its treasury stock with a view to merging with the smaller lender. «The agreement will enhance the capital base of Piraeus Bank Group by at least 200 million euros,» Piraeus said, adding that it will also boost its per-share earnings. Shares in Piraeus Bank ended 3.70 percent higher at 11.40 euros, while stocks in Proton slumped almost 30 percent to 2.78 euros. Trading in both stocks on the Athens bourse, which jumped 5.6 percent yesterday, had been temporarily suspended. Analysts pointed out that the deal prices Proton Bank shares at a discount of nearly 50 percent on Friday’s closing price. Piraeus Bank, with a market valuation of 3.7 billion euros, has total assets in excess of 51 billion euros and an 832-branch network in Greece and abroad. Proton, an investment bank which launched operations in 2002, operates a network of some 30 branches and has assets of 2.3 billion euros. «The deal will not have a big impact on Piraeus Bank,» said an analyst who requested anonymity. «The immediate benefit for Piraeus is that it will be able to quickly expand its network.» The global financial and credit crisis has driven Greek bank stocks 28 percent lower in the last 30 days, making valuations a lot more attractive to takeover activity. Panayiotis Thomopoulos, the deputy governor of Bank of Greece, welcomed the deal, saying, «Moves that boost the capital position, the competitiveness and the prospects of Greek banks in Europe are welcome.» Last week, Marfin Investment Group (MIG) announced it would seek a 5-billion-euro share capital as it eyes opportunities in the financial sector. [email protected]

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