Crucial Laiki merger goes to the vote today

LAIKI’S shareholders meet today to vote on whether their bank should merge with the Marfin Financial Group and Greece’s Egnatia Bank.

The Extraordinary General Meeting (EGM) will be held at Nicosia’s International Conference Centre at 5pm.

Back in September, the Laiki Group launched a bid for Marfin and Egnatia Bank in a move designed to create a financial heavyweight focused on fast-growing Balkan and Middle Eastern markets.

According to Cyprus’ second largest lender, by the end of 2006, Laiki and the new combined group would have 22.3 billion euros in assets, 300 branches and a presence in 13 countries. The new venture will be headquartered in Nicosia.

From the outset, the move has been shrouded in criticism that the share value of Egnatia and Marfin were overvalued and that Laiki’s shareholders would be getting the raw end of the deal.

Moreover, critics say that no due diligence report was carried out.

And a number of small shareholders complained of being kept in the dark over the deal and presented with a fait accompli.

To dispel any suspicions, new CEO Andreas Vgenopoulos and Laiki’s top brass decided to postpone the vote on the merger by one week – it was initially scheduled for last Tuesday –giving shareholders time to review financial data.

Meanwhile an epithet-strewn row between former Laiki boss Kikis Lazarides and the merger’s broker, Greek financier Vgenopoulos, has added to the flavour.

Last week Lazarides alleged that Vgenopoulos had tried to bribe him to secure his endorsement of the deal. Lazarides says he turned down the offer; but has since come under fire for not disclosing this earlier.

Laiki’s new leadership has launched an internal audit into Lazarides’ activities as the bank’s executive chairman.

Yesterday the last procedural obstacle for the merger was removed when Greece’s Securities & Exchange Commission approved the issuing of Laiki prospectuses for the public offer regarding the purchase of Marfin and Egnatia shares.
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The Cyprus Mail is the only English-language daily newspaper published in Cyprus. It was established in 1945 and today, with its popular and widely-read website, the Cyprus Mail is among the most trusted news sites in Cyprus. The newspaper is not affiliated with any political parties and has always striven to maintain its independence. Over the past 70-plus years, the Cyprus Mail, with a small dedicated team, has covered momentous events in Cyprus’ modern history, chronicling the last gasps of British colonial rule, Cyprus’ truncated independence, the coup and Turkish invasion, and the decades of negotiations to stitch the divided island back together, plus a myriad of scandals, murders, and human interests stories that capture the island and its -people. Observers describe it as politically conservative.