Piraeus Bank pulls bid for ATEbank, Postbank

Piraeus Bank, Greece's fourth largest lender, withdrew its offer to buy government stakes in ATEbank and Hellenic Postbank saying the government took too long to decide, its deputy CEO said on Thursday.
"Two and a half months after expressing interest for ATEbank and Hellenic Postbank, Piraeus Bank withdrew its interest after seeing that the pertinent (government) decisions are not to be expected in the immediate future," Deputy Chief Executive Stavros Lekkakos said in a statement.
Piraeus, Greece's fourth largest lender, had offered 701 mln euros ($954 mln) in cash for 77.3% of ATEbank and 33% of Hellenic Postbank (TT).
Greek banks face a tough economic environment as austerity policies to slash deficits have deepened the recession at home, leading to a rise in non-performing loans.
In response the government called on its lenders to rethink strategy and form stronger groups to cope with the effects of the country's debt crisis, fanning speculation that mergers and acquisitions will reshape the banking landscape.
Concerns about solvency have caused a knock-on liquidity problem. With wholesale funding markets effectively closed to them, Greek banks have now borrowed more than 90 bln euros ($122 bln) from the European Central Bank.
"I don't think the consolidation game is over in Greece, the banks are still under pressure by the regulator to merge and/or raise equity, so I think we will see other developments in the next few weeks," said UBS analyst Alexander Kyrtsis.
Greece hired HSBC, Deutsche Bank and Lazard to produce proposals on how best to consolidate its banking sector and evaluate Piraeus Bank's offer.
With government officials saying decisions on the project could take months, the waiting period for Piraeus was getting to be too long, prompting a rethink of its priorities.Acquiring the stakes would have entailed a capital increase.
"For Piraeus it would always have been a difficult acquisition as it would have needed to raise capital to do it, which in the current climate would not have been ideal," said analyst Tania Gold at Unicredit.
"I would not rule out NBG or Eurobank bidding for Hellenic Postbank as they both already have stakes," she said.
Piraeus Bank, also present in Romania, Bulgaria, Serbia, Albania, Cyprus, Egypt, Ukraine and the United States, had hired BofA Merrill Lynch, Goldman Sachs and UBS as advisers on its offer.
Its shares, down 56% so far this year, were up 0.28% at 3.57 euros. Shares in TT were down 2.1% at 4.14 euros with ATEbank up 1.1%.
"Given the government's delay in unveling its intentions, Piraeus move is reasonable. Piraeus will now start considering any strategic moves from scratch," said analyst Nick Koskoletos at EFG Eurobank Securities.
Government officials were not immediately available for comment.
ATEbank has said it prefers a quadruple merger than teaming up with Piraeus. Its chief has counter-proposed merging with TT, Attica Bank and the Loans and Consignments Fund to form a strong state-controlled pillar in the country's banking system.