The market is shocked after the deal between the National Bank and Alpha Bank went sour. The Greek government was hoping for a positive climate change in its finance sector.
It is characteristic that the Finance Ministry had earlier commended this development, creating the impression that the deal was closed.
Obviously thousands of investors abroad were betting on the announcement of the Ministry, and were placed in the ADR (certificate) of the National Bank, currently under negotiations in Wall Street.
The dramatic developments occurred in the afternoon, after the refusal of the National Bank from Alpha Bank’s board. After an hour-long board meeting, the terms were characterized as inexpedient – besides the fact that the proposal contained premiums of 28%.
However, the real reason of the rejection was the fact that Alpha’s position in the new deal would be 29% against 71% of the National Bank. The same deal if concluded in previous years, would have been at 39% – 61%.
The National Bank and its executives answering this rejection are stating their surprise for two reasons:
The uncertainty in Alpha’s announcement can find a response from the National Bank’s proposal. The 25th bank in Europe is created and ultimately, “the stubble in the valley can not find a better way to deal with the crisis.
The second reason for which the National Bank does not believe in Alpha’s answer is that the shareholder of the specific bank will have a 40% raise of the worth of the share in the new bank as the synergies from the merger are estimated at 3. 5 billion euros.
30% of these synergies goes to the shareholder and raises its worth, according to executives of the National Bank.