Bank of Cyprus on Wednesday night surprised investors by withdrawing a €3.78bn cash-and-shares offer for Greece's state-controlled Emporiki Bank, leaving France's Credit Agricole as the only bidder.
The Cypriot bank said in a statement on Wednesday it would seek the approval of the Greek authorities to revoke its offer for Emporiki, the centerpiece of the conservative government's 2006 privatisation programme.
Analysts said the Greek Cypriot lender was concerned that Emporiki's uncovered pension liabilities could reach as much as €1.2bn, in spite of renewed by the bank's management that the Greek finance ministry had resolved the issue.
With the bidding deadline set for July 25, there would still be time for another Greek bank to trump Credit Agricole's €3.1bn offer for Emporiki. Alpha Bank, the biggest private Greek bank, has not ruled out making a bid.
George Alogoskoufis, the finance minister, said Greece is keen to attract a west European bank in order to boost competition.
Credit Agricole will come under pressure to increase its offer of €23.5 per share, which was seen as undervaluing Greece's fourth-biggest bank. The French lender already holds 9 per cent of Emporiki and is understood to be satisfied with the Greek government's solution to the pension problem.
BoC's pull-out from the race leaves it open to a possible takeover bid by Bank of Piraeus, Greece's fifth-largest bank by assets.
Source: Financial Times
