Piraeus Bank offered yesterday to buy stakes in two state-controlled lenders for 701 million euros in a move seen as likely to trigger takeover activity in the country’s financial sector. Piraeus, Greece’s fourth-largest bank based on market capitalization, bid to acquire 77.1 percent of ATEbank for 372 million euros and 33 percent of Hellenic Postbank (TT) for 329 million euros. Piraeus Bank CEO Michalis Sallas said the proposed deal would create the country’s largest banking group with assets worth more than 105 billion euros. «This is a proposal which we believe will be beneficial for Greek society, the banks themselves, the state and the general atmosphere so that we can escape these conditions of gloom,» Sallas said. «The decision is not mine. It is up to the government to study this proposal and make its decision.» The Finance Ministry said it was studying the proposal. The move follows public statements by government officials that Greek banks were likely to merge in order to better weather the country’s acute financial crisis. Finance Minister Giorgos Papaconstantinou told Parliament late on Wednesday that there was «an urgent need» for banks to consider mergers. Shares in the three lenders soared on the Athens bourse yesterday after being temporarily suspended during the session. Piraeus Bank shares jumped 12.66 percent to 4.54 euros and TT leapt 21.48 percent to 3.28 euros. Piraeus Bank’s offer prices TT shares at 3.50 euros each, which translates into a premium of 30 percent based on Wednesday’s closing price. ATEbank shares added 6.54 percent to 1.14 euros yesterday. Piraeus’s purchase offer prices ATEbank shares at 0.53 euros apiece, a discount of 50 percent. The three lenders are among six Greek banks on a list of 91 European banks undergoing a stress test by the European Union to probe potential financial vulnerabilities. Proton Bank said yesterday that Piraeus aims to combine TT’s solid capital and liquidity positions and ATEbank’s clientele with its know-how but added that it has a lot of work to do to make the two lenders become more efficient. «If agreed to with the government, the move may trigger similiar moves by other players with positive implications for the market’s efficiency,» Proton Bank said in a note to investors. Apart from needing to convince shareholders about the possible benefits of the deal, Sallas will also find himself faced by workers at the two state-controlled banks opposing the merger. Upon hearing the news yesterday, TT employees walked off the job for three hours, while ATEbank employees called a 24-hour strike for today. «We are warning them… not to dare,» ATEbank workers said in a statement.