THE CEO of Piraeus Bank Michalis Sallas will be in Cyprus today meeting with financial and political leaders to smooth the way for his takeover bid for Marfin Popular Bank.
Early in the morning, the top executive will see Central Bank governor Christodoulos Christodoulou, and later in the day will be meeting with top brass from the Bank of Cyprus, Marfin’s main rival on the island. Sallas’ agenda also includes meetings with Archbishop Chrysostomos, Securities and Exchange Commission (SEC) chairman Giorgos Charalambous and Akis Kleanthous, chairman of the Cyprus stock exchange.
Greece’s fourth largest lender, Piraeus holds a stake of just under 10 per cent in the Bank of Cyprus. But its recent cash-and-stock offer to take over the bank was rejected by BoC’s board.
Piraeus Bank is currently tendering to acquire at least 40 per cent of Marfin Popular Bank. Marfin made a rival bid for Piraeus and the Bank of Cyprus, which was ruled invalid by the local securities regulator.
Bank of Cyprus have so far resisted merger offers that have come their way, evidently confident they can go it alone based on sound profits and planned expansion abroad, especially in Russia. But analysts say it is only a matter of time before the bank will have to join forces with other groups in an ever-increasingly competitive market.
Meanwhile Piraeus yesterday announced it would be asking its shareholders to approve an increase in the bank’s share capital with a view to buying Marfin. Piraeus’ offer involves trading every one of its shares for 5.7 of Marfin’s shares, valuating Marfin at half its current market price, which is around 6.5 billion euros.
According to the Greek giant, the merger will create the second largest banking group in Greece with some 800 branches.
Piraeus has convened an Extraordinary General Meeting of its shareholders in Athens for 12 February to vote on the proposed merger.
Dubai Financial, which holds a 17 per cent stake in Marfin, has since flatly rejected Piraeus’ offer.
Last week’s developments saw the political and financial establishment cringe at the prospect of Marfin, seen as a foreign concern, taking over the Bank of Cyprus, a sacred cow on the island.
Even the Church stepped into the fray, with Archbishop Chrysostomos declaring that Cypriot banks should not be “ransacked by foreigners, whoever they may be”.
The extremely wealthy Archbishopric is the main shareholder in Hellenic, the third largest bank in the country.
Chrysostomos said the Archbishopric would be buying “a share package” in the BoC and would also be increasing its stake in Hellenic.
Similar sentiments were expressed yesterday by House Speaker Demetris Christofias who, commenting on the battle of the banks, said everything should be done to avoid creating a monopoly or an oligopoly.
Christofias was speaking after seeing Competition Protection Commissioner (CPC) Giorgos Chrisrofides. The AKEL leader suggested that the CPC should act as a “buttress” to such designs.
For his part Christofides said the CPC was keen on preventing “big-fish-eat-small-fish” practices.