Old and still drinking water and eating dry white toast.
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Nope just a good guess
Alpha Bank A.E. (ADR) (Public, PINK:ALBKY)
ALBKY
The Big Fat Greek Bank Wedding That Hasn’t Happened, Yet
Alpha Bank, Greece’s third largest lender, jilted National Bank of Greece at the altar, forcing a temporary cancellation of a fat €2.9 billion marriage offer. The coquettish bride argued the interest was unsolicited and disadvantageous.
This is the fourth time the “on-again, off-again” relationship has failed. But it is not an unhealthy obsession without sense. The fallout from the rift has troubled the shareholding parents-in-law who want the banks to go forth and multiply profits.
And the two preachers, the local Finance Ministry and the National Bank of Greece, look silly having rushed to bless the union. Because state preference shares worth €1 billion were given to Alpha to improve its attractiveness, they could coax the match. But that would be interfering.
Meanwhile, investors still hope Alpha and National will “do the right thing”, which has sent Alpha stock surging. But the stalemate will likely mean a share price correction.
Friday isn’t the first time this marriage wasn’t consummated. Exactly ten years ago the two banks nearly got together, but they fell out over who should be the boss. This time round there was a pre-nuptial to share governance, but still Alpha felt under-appreciated. It still feels undervalued.
The repeat runaway bride’s excuse this time is that NBG, the biggest bank in town, has too much baggage. NBG has more than €20 billion worth of sovereign debt compared to a quarter of that at Alpha.
Should a default occur, the combined entity would expose Alpha shareholders to bigger risks. Realistically in such a situation, NBG is best placed to cope given by end of this quarter it will have raised a fresh €2.8 billion in cash over six months.
How would Alpha’s real estate portfolio and high weighting to corporate loans fair in this scenario? Could haircuts of 60% apply to some assets instead of the 30% on NBG’s sovereign bonds?
Alpha didn’t consult its shareholders before turning away the suitor bearing premium gifts. Stockholders know NBG is not perfect. But they know Alpha’s size isn’t viable in the long term. It needs a partner to give it critical mass.
Alpha is also needy and high maintenance. It may need about €1 billion in fresh cash within months. Pretending the best local bank’s capital and liquidity are not good enough may prove foolhardy.
For sure, there will be no romance without finance. If National gets on its knees and ups its premium to 30% from about 25%, sparks could fly. NBG fears another rejection and it’s too proud to chase and haggle. So ego may cost it the least ugly Greek bank match.
Meanwhile, narcissistic Alpha claims the markets don’t properly value its charms, and based on that neither does NBG. Greek banking circles commonly bristle with excess pride at the expense of logic, but its share price will deflate as NBG’s interest fades.
NBG is offering Alpha shareholders a 25% premium on day one and another 25% pickup if only half of the synergies emerge. And that’s not too shabby.
So should NBG go hostile and try to snatch the bride?
Yes, in good time. But NBG can afford to play the long game here.
When Alpha eventually goes cap in hand to shareholders, NBG will likely swoop with a hostile bid. It can make the same offer without sharing governance. Shareholders are likely to take NBG’s offer – not only to avoid a hit on cash and bypass dilution, but also to bag the premiums.
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Minus 7 hours
The World Clock
Greece's NBG Says Alpha Bid Viewed Positively
ATHENS (Dow Jones)--Greece's largest lender, National Bank of Greece SA (NBG), said Monday that its takeover bid for smaller peer Alpha Bank SA (ALPHA.AT) will be seen positively by the market despite its rejection.
NBG Friday announced a EUR2.9 billion all-share offer for its smaller rival, but Alpha's board unanimously rejected the offer, citing the "uncertainties of the current environment" and calling the terms less than "beneficial" for shareholders.
"We were surprised by Alpha's management negative response to our friendly offer but we are confident the market views the bid very positively despite its rejection," NBG Chief Executive Apostolos Tamvakakis said on an investor conference call.
NBG management wanted to present the deal directly to investors on the call. They stopped short of saying whether they would improve the terms of the deal, relying instead on the market and shareholders to exert pressure on Alpha's board to reconsider the offer.
Market watchers believe that NBG won't unilaterally sweeten the offer unless Alpha Bank comes back to the table in good faith. Negotiations could then take place on additional governance benefits and the value of any synergies.
The market reaction Monday suggests investors clearly do not believe that the rejection killed off a deal. At 0945 GMT, Alpha shares were up 13.3% at EUR5.423, incorporating the takeover premium, and NBG shares were up +2.1% at EUR7.73, both in very heavy trade. Meanwhile, the Athens general index was flat at 1,717.4.
"We believe our proposal is very beneficial to Alpha shareholders and we are grateful for the encouragement of our shareholders as well as the wider market for our bid," Tamvakakis added.
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After the election, the Irish government should take a page out of the Greek bank play book (NBG trying to merger with Alpha bank)
Does anybody have any bank merger options for Bank of Ireland (IRE) within the next six months?
P.S. It's starting to look like a "COLD day in HELL" for my $1.50 buy-in offer.... Looks I have to raise my offer higher to join the IRE party.
Disclosure: The NBG party is sweet, holding 7000 shares
Wrecked the friendly merger of National-Alpha
Rapid developments in the banking system from rejecting the proposal of the National Bank of Alpha Bank, which gives the total mobilization of domestic banks, opening again the dialogue between them on mergers and further capital injections. This is the second attempt to merge the National Bank and Alpha Bank, in ten years. The discussions came prematurely released, forcing the National, amid speculation a sudden, to release its proposal for the Alpha Bank and CEO of the latter to meet occasionally, and this was scheduled for Tuesday, February 22.
Earlier, Finance Minister stated that "the government encourages such initiatives aimed at strengthening the Greek banking system," he said earlier by Finance Minister Giorgos Papakonstantinou. The National Bank for its part, stressed the particular importance of the agreement for the Greek financial system, the Greek economy and Greece as a whole, because it means the banks would be able to repay their debt to the European Central Bank not to sell "silver" the , ie the Balkan network would create a bank size that could reliably be borrowed from the international market and in turn to provide liquidity to the needy Greek economy and the country seemed to be able to major moves like this protovouliakes to get in the way of exit from the current stranglehold of crisis and under surveillance.
Under the proposal, shareholders of Alpha Bank would receive 8 new shares for every 11 National existing shares of Alpha. In this way, the National would have 71% of the new bank and the Alpha 29%, while the exchange ratio entailed 23.4% premium over the closing price of Alpha Bank, on January 17, 2011, one day ie prior to submission.
The EIB is estimated that the merger would achieve synergies of around 550-700 million annually at full development.
"This proposal allows shareholders of Alpha and National benefit from the considerable value which, in its assessment of the state, resulting in the implementation of the proposed merger, stressed in a statement by the EIB.
On February 3, 2011 the two banks signed a confidentiality agreement of exclusive negotiations and refrain from taking alternative measures («NDA») and the relevant government officials entered into discussions on the terms of this proposal.
"The proposed merger would create the largest bank in Greece, which we believe will be able to play a pivotal role in the reconstruction of the Greek economy. I am convinced of the benefits of the proposed merger and will have a positive response from shareholders of both banks, "commented the President of the EIB, Vassilis Rapanos.
"We have great respect for the Alpha, its executives and those achieved in recent decades under the leadership of Mr. Kostopoulos. We await the response of the Board of Alpha Bank and the positive response to our friendly proposal. The merger is expected to create significant value for shareholders of both banks and deliver multiple benefits for the entire Greek economy. We want and expect to receive a positive recommendation by the Board of Directors of Alpha. In this important initiative, take the first step to restructure the banking sector in Greece ", said CEO of the bank, St. Tamvakakis.
Communication SYRIZA
The proposal SYRIZA long ago, to create a strong public-pillar banking as a necessary tool in development and social policy is the opposite and even more true today. The government, however, whether the merger eventually, privatize the National, which, obviously, will follow the TT, SA and any other public bank.
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Marathon meeting at Alpha Bank
Crucial meeting Sunday of top managers of Alpha Bank with the participation of consultants from the financial institution, JP Morgan and Citibank, after the initial rejection of the second decade in a proposed "friendly" merger, which received the National Bank. According to information submitted to the meeting a detailed formulation of the reasons for the refusal of the offer. "The matter has not ended, however just started," said a senior member of the MIP, which relies on statements by the Reuters news agency.
"The Greek banking system to seek redeployment," says the Nation Sunday by Finance Minister Giorgos Papakonstantinou.
Communication OTOE
The proposal of the National Bank ignored issues relating to employment protection to banks, thus confirming the "danger signal" which is broadcast by OTOE, posing as a central demand in the sectoral collective agreements to protect jobs in banks in view of acquisitions and mergers, to meet today with evasions and denials Banks, states, inter alia, OTOE in a statement.
Immediately after the rejection of a proposal from Alpha Bank, reportedly in terms of the National Bank was surprised by this decision. On the side of the national states that the powerful new bank that will result from the merger was one of the five best capitalized banks in Europe and will enable direct access to the interbank market, resulting in the cessation of others. With the ultimate effect of further strengthening the financial possibilities of households and businesses at a time when the domestic banking system facing liquidity issues due to the impact of financial crisis.
Also, according to officials at the National, the proposal was in the interest of the shareholders of Alpha Bank, and gave a very high premium, even for European standards. "The uncertainty surrounding the current situation created by the proposal, reasons given by the Alpha Bank, the statement of rejecting the proposal, according information from the National, was precisely the argument that the merger would be effected. While also noted that during the negotiations there was no indication on the part of Alpha Bank for not succeed.
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National Bank of Greece Caps Alpha Bank Bid
ATHENS—National Bank of Greece SA, the country's largest bank by assets, may be ready to slightly sweeten the bid in its friendly takeover of Alpha Bank, but isn't prepared to double the premium that Alpha is demanding, a senior person familiar with the matter said Saturday.
On Friday, NBG announced it was making an offer to acquire Greece's third-largest lender at close to a 20% to 25% premium. It is offering eight shares of the new entity for every 11 shares in Alpha Bank.
Hours later, Alpha's board unanimously rejected the offer. In a bourse filing the target bank argued that it couldn't accept the offer because of the "uncertainties of the current environment," and also because it deemed the terms as less than "beneficial" for shareholders. But the rejection is widely seen as a ploy by Alpha's board to hold out for a better deal.
"Alpha is asking for more than a 40% premium, and almost 50%, and there is no deal in Europe done on that kind of a premium, let alone given them governance [a management stake] as well," the person familiar with the matter said. An Alpha Bank representative declined to comment.
This is the first shot fired in the long-awaited consolidation of the fragmented Greek banking system. The government and central bank have been touting tie-ups as a way of curing liquidity and capital adequacy issues faced by the banks.
The person familiar with the matter said that "the trigger for the deal" was a growing expectation Alpha would soon need to raise over a billion euros in fresh capital from the markets after similar moves by other Greek banks. A takeover by NBG, with its high liquidity and capital adequacy, would avert the need for Alpha to raise that capital. The synergies are also very high compared to current valuations, he argued, and it would create a "fortress balance sheet."
"This same deal has been looked at about four times over more than 10 years because both banks have a culture of conservatism, and industrially it makes sense given they have complementary networks," the person said.
Local analysts said Alpha Bank may be justified in expecting a sweetened deal because they hold only about €5 billion ($6.84 billion) in Greek sovereign debt while NBG has over €20 billion.
That means the bidder's balance sheet would be hit more in the event of a Greek government debt restructuring or default, a fear that has weighed on Greece's banking sector over the past few months.
On the other hand, Alpha, whose loan portfolio is more exposed to Greek corporates, SMEs and real estate, is also feeling the effects of Greece's ongoing recession more than the better-diversified NBG.
"NBG may be ready to squeeze slightly more into the offer, like an additional few percentage points more in premium to seal the deal, even if it always wanted to avoid nasty negotiations," the person said. "But not much more than that, or too close to a 30% premium."
The person argued Alpha shareholders get a 25% pickup on day one of the deal, and if half of the planned synergies arise then its shareholders will make about a 50% premium.
"Although Alpha is being given a healthy premium, the offer still only values the bank at just below 0.8 times its book value and they are likely to be seeking full book value to sell out," said a senior international banking analyst on condition of anonymity.
But the person familiar with the matter said Alpha is trading below book value, unlike NBG, which trades at par, because the market is convinced it may need about €1.5 billion in fresh capital from its shareholder within months.
"NBG is 2.5 times Alpha's size and yet is offering governance in addition to the significant premium," he underlined. If Alpha agrees to the current terms it would get to appoint the chairman, the deputy chairman and an equal number of executive directors. However, it would appoint fewer than half of board members and wouldn't control the chief executive position.
About a decade ago, when a similar deal between the same two banks was being implemented, issues over management appointments and, to a lesser extent, corporate culture led to the deal's demise.
"NBG has not appreciated the behavior of Alpha in holding an emergency board meeting on Friday and refusing the deal. They believe the other side want to sink it for personal reasons," the person familiar with the matter added.
NBG "is prepared to wait on the sidelines. If Alpha's share price takes a hit, shareholders may force its reticent board to put the deal to vote in an extraordinary meeting," the person added.
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Greek NBG's bid for Alpha has compelling merits-source
Greek National Bank's (NBG) (NBGr.AT) all-share bid for Alpha (ACBr.AT), which was rejected on Friday, is still valid and should be considered, a high-ranking NBG official told Reuters on Saturday.
"NBG's proposal to Alpha Bank is still on the table. We believe our offer has compelling merits and should be considered as such by all stakeholders," the official, who did not want to be named, said.
NBG, Greece's biggest bank, on Friday made an 8-for-11 share bid for Alpha, valuing it at around 3 billion euros ($4.0 billion). Alpha turned it down, saying it was not in its shareholders' interests
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No problem, I've added the information as a sticky - been down that the ADR road and had a few blond moments myself.
ETE:NBG - PRICE/ADR Conversion
ETE (Athens Market): 7.570 EUR
Conversion based on 1.3698
Dollar: $10.3698
ADR Ratio: 5:1
NBG (US Market): $10.3698 /5 equals $2.07 dollars
ADR Ratio
Euro Rate Graph
I've been watching ETE on the Athens market to see how it affect the US ADR trading market.
ETE / NBG chart Insert NBG to compare
Normally we lag and our range bound by the athens exchange market trading.
The other indicator you want to watch is EUR/US.
If EUR/US is trading down then NBG trades down.
If EUR/US is trading up then NBG trades up.
Look back over the last few years and you will notice that the EURO peaks and NBG peaks are about the same.
Good-luck
Bank of Greece to present monetary policy report
Bank of Greece governor George Provopoulos on Tuesday will submit to Parliament the bank’s report on monetary policy which focuses on progress of fiscal consolidation efforts and structural reforms.
The central bank, according to sources, will stress that the biggest challenge for the Greek economy is competitiveness, and that will be a determining factor for economic recovery.
However, the report will note that the country’s Gross Domestic Product will continue to shrink this year, although at a slower pace compared with last year. The GDP is projected to fall by at least 3.0 percent in 2011, without excluding a slightly bigger figure.
The central bank will recommend the continuation of efforts towards fiscal consolidation with more emphasis given on spending. The report will underline the need to boost efficiency of public spending and to abolish all unnecessary public sector agencies, along with promoting a restructuring of public sector enterprises.
The bank will urge the government to emphasize more on growth by accelerating structural reforms. The central bank believes that the country can efficiently deal with rising public debt only through higher GDP growth, while it will recommend the implementation of a privatization programme announced by the government along with a more efficient management of the state real estate property.
The Bank of Greece will underline that the banking system’s capital adequacy is at satisfactory levels, strengthened after the successful completion of share capital increase plans by major banks. The bank, however, will note that credit expansion will remain at very low levels this year also.
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Greece Must Speed Deficit Cutting Efforts, Central Bank Says
Greece must speed up its deficit- reduction efforts and do more to shrink spending on the public sector in order to restore growth to an economy that may shrink more than 3 percent this year, the Bank of Greece said.
Greece’s economy probably contracted slightly more than 4 percent last year and unemployment rose to more than 12.5 percent, the Athens-based bank said in its 2010-2011 Monetary Report. Unemployment will rise further this year, while the inflation rate will fall to 2.2 percent, with core inflation under 1 percent, the report said.
Additional structural measures, to be presented by the government in March, will ensure the general government deficit is cut to less than 2.6 percent of gross domestic product in 2014, the central bank said.
Greek banks face “big and complicated challenges” in 2011 with an expected increase in non-performing loans and credit expansion seen stagnating or declining, the statement said. The central bank reiterated lenders should reduce their reliance on European Central Bank liquidity.
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Statement by the EC, ECB, and IMF on the Third Review Mission to Greece
Staff teams from the European Commission (EC), European Central Bank (ECB), and International Monetary Fund (IMF) visited Athens during January 27 to February 11 for the third review of the government’s economic program, which is being supported by a €80-billion loan from Euro area countries and a €30-billion Stand-By Arrangement with the Fund.
The objectives underpinning the program are to restore fiscal sustainability, safeguard financial sector stability, and boost competitiveness—to create the conditions for sustained growth and employment. Maintaining social fairness in shouldering the burden of adjustment in the program also remains of paramount concern and this will continue to guide the direction of policies in the period ahead.
Our overall assessment is that the program has made further progress toward its objectives. While there have been delays in some areas, the underlying fiscal and broader reforms necessary to deliver the program’s medium-term objectives are being put in place. However, major reforms still need to be designed and implemented to build a critical mass necessary to secure fiscal sustainability and economic recovery.
Regarding the outlook, the recession has to date been close to what was anticipated. Underlying inflation has remained low in the face of rising commodity prices. Downward movement of unit labor costs should support gains in competitiveness. Encouragingly, exports have performed well recently. We continue to expect the economy to stabilize late in 2011.
In the fiscal area, against the sharp macro headwinds, the authorities delivered a 6 percent of GDP fiscal adjustment in 2010, reducing the deficit to about 9½ percent of GDP. This is an impressive achievement, but some tensions were evident in budget implementation, in particular shortfalls in revenue collections, and problems with spending control. The program has been designed to address these problems, and the work is progressing.
The government has begun to specify a medium-term budget strategy, which will define time-bound actions to realize the full fiscal adjustment through 2014. The reforms are complex and cover among other issues taxation, health, public employment, and state enterprise reforms. The government is appropriately allowing time for consultation with social partners before moving beyond the design phase to begin implementation. The government’s full commitment to this complicated process of institutional change, not least determination to resist vested interests, will be critical to success.
Concerning financing, the government continues to work toward securing a gradual return to bond markets at affordable interest rates. Strong program implementation, with financial support from the international community, remains key to achieving this. It is equally important that the government notably scales up its privatization program, and more generally realizes better returns from its extensive portfolio of assets. Work is proceeding to establish a comprehensive inventory of the government’s real estate assets, and to define a phased action plan.
As to the financial sector, tight liquidity and rising non-performing loans are putting strains on the banking system and credit is contracting. Encouragingly, private banks have recently enjoyed some success in raising capital. It is essential that the government makes progress in addressing the stability and efficiency of the banks under its control. The Eurosystem has been a key source of liquidity support for the system, and this is allowing banks to gradually move towards a sustainable medium-term funding model. The Financial Stability Fund is available to provide support to banks in the system, if needed.
Structural reforms are making progress. Legislation covering aspects of the labor market, the liberalization of closed professions, health care reform, licensing, and the competition authority has either been passed, or soon will be. The authorities’ focus must now be on implementing these laws, to make sure the new frameworks are effective as soon as possible. To secure economic recovery, early progress on structural reforms remains critical. The government must ensure that reforms are sufficiently ambitious and comprehensive to tackle the deep seated structural challenges facing Greece. The next steps will focus on, among other things, reviving the tourist industry, removing administrative barriers to exports, and strengthening public procurement.
Next Steps. Approval of the conclusion of the third review will allow the disbursement of €15 billion (€10.9 billion by the euro area Member States, and €4.1 billion by the IMF). The mission for the next program review is scheduled for May 2011.
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Your wait is over....looking for $2.50 entry point
NBG Financial Calendar 2011
Athens : 31/01/2011
National Bank of Greece informs the investor community that the financial results of the Bank and the Group will be announced on the following dates:
Wednesday March 23rd 2011: Full Year 2010 Results
Thursday May 26th 2011: 1st Quarter 2011 Results
Tuesday August 30th 2011: 2nd Quarter 2011 Results
Tuesday November 29th 2011: 3rd Quarter 2011 Results