Financial News: Alpha Bank rejects NBG merger proposal

Alpha Bank’s board on Friday unanimously rejected National Bank’s merger plan, which was announced earlier in the day.

The bid was the second in a decade where a merger plan between the two banks failed to materialise. A bank statement said Alpha Bank’s board “unanimously, and after examining the terms of the proposed merger, rejects the plan, taking in view the uncertainty created by the current economic situation and the context of the plan, whose terms are considered not to be to the benefit of Alpha Bank’s shareholders”. (ANA-MPA)

National Bank’s offer

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 had 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 expected that Alpha Bank’s board would examine the offer very seriously.

Under the offer, Alpha Bank’s shareholders would have  received 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 included 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 would 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.

Finmin welcomes Alpha-NBG merger talks

Finance Minister George Papaconstantinou on Friday welcomed news that National Bank of Greece and privately-owned Alpha Bank were discussing a merger, saying that the government encouraged similar initiatives that would strengthen the Greek banking system and lead to a faster exit from the economic crisis.

Papaconstantinou said the government had repeated pointed out the need for a reorganisation of Greece's banking system that would allow it to cope with the current more difficult conditions and play a positive role in the present crisis by directing liquidity to the real economy and growth.

The government encouraged similar initiatives, while noting that the final outcome of the attempt was the business of the two banks and their shareholders, who would have to make the final decisions.

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