- Title: GREECE: National Bank offers merger to Alpha Bank
- Date: 19th February 2011
- Summary: ATHENS, GREECE (FILE) (REUTERS) VARIOUS EXTERIORS OF NATIONAL BANK HEAD OFFICE NATIONAL BANK FLAG BANK BRANCH OF NATIONAL BANK PEOPLE WITHDRAWING MONEY FROM ATM MACHINE NATIONAL BANK SIGN ON BUILDING EXTERIOR OF ALPHA BANK BRANCH WOMAN TAKING MONEY FROM ALPHA BANK ATM MACHINE SIGN ABOVE ENTRANCE TO ALPHA BANK VARIOUS EXTERIORS OF ANOTHER BRANCH OF ALPHA BANK SIGN ON BUILDING
- Embargoed: 6th March 2011 12:00
- Location: Greece, Greece
- Country: Greece
- Topics: Finance
- Reuters ID: LVAAGXUUNI12QN88YPO7SXLP5VJ6
- Story Text: Greece's biggest lender National Bank said on Friday (February 18) it had made a friendly merger offer to the country's third-largest bank Alpha.
National Bank of Greece kicked off a government-sponsored consolidation of the sector with an all-share bid for the third-largest lender Alpha Bank, valuing it at around 3 billion euros.
NGB, Greece's biggest lender, would control 71 percent of the combined group if its bid succeeds. The move is seen as opening the way for other banks to merge, thereby gaining access to wholesale funding markets closed by a severe debt crisis.
Greek Finance Minister George Papaconstantinou, whose government has been pushing the country's lenders to merge, immediately welcomed NBG's offer for Alpha.
"The government encourages such initiatives, which aim at strengthening the banking system and at a quicker exit from the crisis," Papaconstantinou said in a statement on Friday. "The government has repeatedly said that the Greek banking system must restructure ... The ongoing discussion between National Bank and Alpha Bank is in the right direction."
NBG said it had submitted the proposal to Alpha, which will give the smaller bank's shareholders with 29 percent of the combined group.
Alpha made no comment on the offer. It is the second time the two lenders have attempted to get together. In 2001, despite an agreement at board level, the deal fell through because of management disagreements.
NBG is offering 8 new NBG shares for every 11 Alpha shares, a premium of 18.5 percent based on the banks' closing prices on Feb. 17. The offer represents a 23.4 percent premium on Alpha's closing share price on Jan. 17, NBG added.
It said the combined group would have a balance sheet of 200 billion euros and could generate annual synergies of 550-700 million euros.
The announcement came minutes after the Athens bourse suspended trading in the two banks over merger rumours.
Shrinking deposits have added to the strains of Greek banks, which have become reliant on European Central Bank funding for their liquidity needs as access to wholesale funding remains mostly shut on sovereign debt concerns.
Before the suspension, shares in Alpha Bank rose 6.32 percent to 4.88 euros, while National Bank gained 2.14 percent to 7.64 euros.
National Bank trades at 13 times its estimated 2010 earnings versus a multiple of 40.9 for Alpha Bank, according to data from Thomson Reuters.
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