National Bank of Greece (NBG) on Friday placed an offer to buy Alpha Bank through a merger deal, following an approval given by a joint meeting of the strategy commission, the bank's board executive members and the representative of the Greek state.
In a letter to the Capital Markets Commission, National Bank said it has signed an agreement of confidentiality with Alpha Bank in February 3, 2011, to hold exclusive negotiations and to avoid taking alternative measures. National Bank stressed it was confident over the financial and strategic benefits of its offer and expects that Alpha Bank's board will examine the offer very seriously.
Under the offer, Alpha Bank's shareholders will receive eight new shares of National Bank for each 11 shares in Alpha Bank, for an exchange ratio of 0.727 shares of National Bank for each one of Alpha. This offer includes a premium of 23.4 pct over the closing price of Alpha Bank's shares on January 17. Under the offer, National Bank's shareholders' relative participation in the new group will total 71 pct, while Alpha Bank's 29 pct, with the Greek state and other pension fund participations totaling 0.9 pct and 12 pct, respectively.
The proposed merger will become a very significant step towards consolidation and strengthening of the banking system, taking in view the challenges of the current conjucture. The merger plan will lead to the creation of the largest and strongest bank in Greece, with a strong liquidity base and a leader in Southeastern Europe. It will also offer significant added value to both banks' shareholders and multiple benefits to Greek enterprises and households and to the Greek economy, in general.
Finalization of the transaction will depend on the successful completion of a series of preconditions, such as due diligence report, final approval by both banks' board and the signing of a merger framework.
"The proposed merger will create the largest bank in Greece, which we believe will be in a position to play a crucial role in an effort for the reconstruction of the Greek economy. I am confident of the benefits of the proposed merger," Vasilis Rapanos, National Bank's chairman said in a statement, while Apostolos Tamvakakis, chief executive of the bank stressed: "We think very highly of Alpha Bank and its executives for its achievements over the last decades under the leadership of Mr. Kostopoulos. We expect the response of Alpha Bank's board and a positive answer to our friendly offer. The merger will create significant value for both banks' shareholders and to offer multiple benefits for the Greek economy." Tamvakakis added that the offer was the first step towards reshaping the banking sector in Greece.
Meanwhile, the board of the Athens Stock Exchange on Friday suspended trade in NBG and Alpha Bank shares after rumours of the proposed merger started to circulate in the market. Before trade was suspended, Alpha shares had posted gains of 6.32 percent and NBG shares had gained 2.14 percent.
source: ANA
