Alpha Bank has stopped the merger with larger rival National Bank of Greece (NBG), stating it would amout to the “quasi-nationalisation” of a private lender, according to a report in the Financial Times.
Michael Masourakis, Alpha’s chief economist, said part of this decision was due to the ever changing executive of the bank stating NBG’s senior management – including the chief executive – were replaced after every election by the incoming government.
The government of Greece exercises control of most of NGBs shares through a 12 percent stake on state pension funds, even though they own less than 5 per cent of NGBs shares.
Mr Masourakis wrote in Alpha’s weekly review of the Greek economy, that the merger with NBG “would mean its quasi-nationalisation and the loss of a competitive advantage, namely the stability of its management.”
Takis Arapoglou, NBG’s chief executive, who was appointed by a conservative administration, was replaced by Apostolos Tamvakakis six weeks after the Socialist party returned to power in October 2009.
NBG has told Alpha Bank that this offer is still on the table even though it’s been rejected by Alpha’s board of directors. It proposed an all-share merger of eight new NBG shares for 11 outstanding Alpha shares, valuing Greece’s third-largest lender at 3 billion euro.
“It’s the end of the road for this deal,” one Greek analyst said. Because Alpha bank has brought to the forefront NBG’s close ties with the government, analysts have said that this has thwarted the bank from any future negotiations.
Source: Financial Times
