They don’t even want to think about the wreck at the Athens Stock Exchange

By Dimitris Pafilas

Everything remains open in the National - Alpha Bank thriller, with the latter asking for a price improvement, while an executive of NBG reportedly said they would not pursue an aggressive acquisition and will insist on the amicable proposal that was put forth. During the weekend there was a conference between execs of the two banks – after the irritation last Friday – with a reopening of discussions.

The suspense, however, of all participants in the market is huge as the non-acceptance of the merger proposal will be treated negatively by foreign and Greek investors. But the good thing is that the discussion on mergers has resumed. On the other hand, it is almost certain that the National and Alpha Bank shares tomorrow will renegotiate if the SEC finds that the necessary explanations were provided by the two administrations.

As a high-ranking member of Alpha states on protothema.gr everything is open with 3 possibilities:
1)   Continue the negotiations between National-Alpha and complete the merger as this is what the Finance ministry is seeking as it was politically exposed by the wreck of the talks.
2)   The possibility of the appearance of a third bank cannot be excluded – to which probably the NBG will answer.
as it will be a heavy blow to the credibility of the Greek stock market.
3) The third possibility, that nothing will happen, is unwanted by everybody as it will be a heavy blow to the credibility of the Greek stock market.

The price is the key

Late on Saturday afternoon Alpha officials ending a meeting released information about a communication - on the part of the bank - which would give a detailed explanation of the reasons for not wishing to respond positively to the proposal of the National.

On its part, Alpha Bank argued that the difference is in the price and not the participation in the new bank or the competence of the new board. «All the rest  is philosophising» says an executive on protothema.gr.

On the other hand, NBG emphasized its surprise since the proposal was, in their opinion, the answer to the «uncertainty» referred to by the board of Alpha Bank. On the other hand, the proposal of the National Bank was advantageous for shareholders both in terms of premiums and in terms of synergies, as there will be synergies of 3,5 billion euros, of which 30% will increase the value of shareholders by 40% .

Pressure in the background

Meanwhile, according to information that cannot in fact be confirmed, pressures are exerted in the background by foreign firms and the Troika in order to complete the merger, so as to create bigger Greek banks that in the future will be able to deal properly with a «shaving» of Greek bonds.

Pressures are placed via shareholders they hold in their portfolios, and a negative position opened in the Alpha Bank share by a foreign fund may not be coincidental.

Mergers between Greek banks serve yet another purpose: The time delay for such processes has resulted in foreign banks (German, French and British ones) to get rid of Greek bonds to reduce damage from a “shaving” by reducing the value.

For a while now the Greek banks have chosen a different developmental scenario: proceed with moves of capital increase, carry out cuts and open the merger talks.

However, the Troika thinks differently as their first concern are the interests of the lenders (damage reduction). Secondly, they will attempt to create a positive momentum in the Greek stock market to attract capital for the Greek economy.