BOC drops out of Emporiki race

The Board of Directors of Bank of Cyprus Pcl unanimously decided to submit an application to the Hellenic Capital Markets Commission for the revocation of its public tender offer for 100% of the shares of Emporiki Bank of Greece S.A..

The Company’s BoD meeting held late Wednesday July 19, 2006 examined the issue of whether to proceed with the Emporiki bid in view of the uncertainty regarding Emporiki’s pension liability following the opinion of the Fifth Department of the Council of State.

Based on Greek legislation, the revocation for any Public Tender Offer can only be accepted following the approval granted by the Greek authorities, something which has not yet been granted.

Greek press reports suggest that the Greek Capital Markets Commission is furious at the way with which BOC decided to exit from the Emporiki bid, since Greek law clearly stipulates that a withdrawal may only be possible as a result of shareholder rejection at AGM/EGM or only after the Commission is asked and then approves such a move.

“In the case of BOC, it was a unilateral move,” Greek press reports suggest.

The Greek authorities and the Greek Finance Ministry officials are furious also at the fact that the whole privatisation effort to sell the Greek government’s 22% stake in Emporiki is at stake. On Wednesday, the share price of Emporiki tumbled 4% lower to 25 euros per share, very close to the bid price of 23.5 euros per share made by Credit Agricole for control of Emporiki.

Sources in Greek would not rule out another postponement of the privatisation of Emporiki in view of the decision of BOC to drop out and CA not improving its bid offer price.