Laiki Greece-Marfin-Egnatia merger to go ahead

THE MERGER of Marfin Bank, Laiki Hellas and Egnatia Bank will get under way following the decision of the three banks’ board of directors, Marfin Financial Group, reports from Athens said yesterday.

Egnatia Bank will absorb Marfin and Laiki, subsidiaries of Marfin Financial Group and Cyprus’ Laiki Bank respectively.

Completion of the merger is subject to regulatory approval as well as to the approval of shareholders, which is expected in the first quarter of 2007.

The banks will appoint financial consultants to advise on the deal, the development of a joint business plan and a share swap ratio.

The merger will result in a new bank with assets of about 8.2 billion euros and a network of 140 branches.

“The new bank that will result will have the critical mass required for it to be competitive and considerably profitable within the Greek banking system,” Marfin Vice Chairman and CEO Andreas Vgenopoulos said in a statement.

Marfin added the board of directors of Egnatia Finance and the Investment Bank of Greece also decided to merge the two firms. The merger is subject to regulatory and shareholders approval.

Marfin Financial Group, 31.5 per cent owned by Dubai Financial, has a 10.01 per cent stake in Cyprus’ Laiki and a 40.6 per cent stake in Egnatia.

Vgenopoulos said that Marfin would withdraw its expression of interest in the sale of Greece’s Emporiki Bank because the Bank of Cyprus counterbid valued Emporiki at about 30 euro per share, and it would not be prepared to submit a better offer.

Referring to reports of Marfin’s interest in Piraeus Bank, Vgenopoulos said that his company had acquired 1.9 per cent of the bank’s outstanding shares.

Piraeus has also bought close to 10 per cent of shares in Bank of Cyprus, the maximum it can without central bank position. The buyout is seen as hostile.

Vgenopoulos said Marfin’s stake in Piraeus was trading related, not strategic and that it would not be pursuing more than two per cent.

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