Ergoinvest SA and Investment Development Fund SA

The management teams of EFG Eurobank Ergasias and Ergoinvest SA and Investment Development Fund SA announce their intention to merge, whereby EFG Eurobank Ergasias will absorb the other two entities. The proposed share exchange ratios have been set at 9 shares of Ergoinvest S.A. for each EFG Eurobank Ergasias share and at 6.7 shares of Investment Development Fund S.A. for each EFG Eurobank Ergasias share.
Ergoinvest S.A. and Investment Development Fund S.A. are closed–end fund management companies listed on the Main Market of the Athens Stock Exchange. Their portfolios consist mainly of shares of ASE listed companies and to a lesser extent by shares of companies listed on foreign stock exchanges, Greek government securities, as well as a limited number of non – listed shares. Through this merger, the successful investment strategy followed to date by the management teams of Ergoinvest and Investment Development Fund will be incorporated in the investment portfolio and the risk management system of EFG Eurobank Ergasias, achieving significant cost synergies. The continuous downturn in both the local and foreign capital markets, has affected closed – end funds, almost all of which are currently trading at considerable discounts to their net asset value. Through this merger, the shareholders of Ergoinvest and Investment Development Fund are offered the opportunity to exchange their shares with shares of EFG Eurobank Ergasias, one of the largest companies listed on the ASE by market capitalisation, with considerable weight in market indices, high tradability and prospects. Based on the average closing share price of EFG Eurobank Ergasias of the past three months (€ 12.40), the proposed share exchange ratio values the share of “Ergoinvest” at € 1.38. This valuation represents a premium of 23% on Ergoinvest’ s average closing share price of the past three months and a discount of 13% to its average net asset value (NAV) during the same period. Based on today’s (6.11.2002) closing share price of EFG Eurobank Ergasias (€ 11.62), the proposed share exchange ratio values the share of Ergoinvest at € 1.29 representing a 22% premium on today’s share price and a 12% discount to its current NAV. Likewise, based on the average closing share price of EFG Eurobank Ergasias of the past three months (€ 12.40), the proposed share exchange ratio values the share of “Investment Development Fund” at € 1.85. This valuation represents a premium of 22% on its average closing share price of the past three months and a discount of 15% to its average NAV during the same period. Based on today’s (6.11.2002) closing share price of EFG Eurobank Ergasias, the proposed share exchange ratio values the share of Investment Development Fund at € 1.73, representing a 17% premium on today’s share price and a 17% discount to its current NAV. The shareholders of Ergoinvest and Investment Development Fund, becoming shareholders of EFG Eurobank Ergasias, will be eligible to the Bank’s dividend for the fiscal year 2002, to be distributed in the spring of 2003. EFG Eurobank Ergasias currently controls 32% of the share capital of Ergoinvest and 43% of the share capital of Investment Development Fund. Following the merger, the portfolios of the absorbed entities will be transferred to EFG Eurobank Ergasias. As a result of the merger, based on the proposed share exchange ratio and considering the cross-holdings between the merging entities, the total number of shares of EFG Eurobank Ergasias shall be raised by about 10 million shares. At the same time, the Bank will cancel an equal number of shares acquired through its buy back programme. Therefore, the total number of outstanding shares of the Bank will remain unchanged. The merger will be completed in two stages. Initially, Ergoinvest will be absorbed, with proposed accounting reference date on 7.11.2002, to be followed by the absorption of Investment Development Fund.
Completion of the merger is subject to the required approval of the Boards of Directors and of the General Assemblies of the three companies, which will be called upon to decide subsequently to the opinion of independent audit firms on the fairness of the share exchange ratio. Furthermore, completion of the merger is subject to the approval of all relevant supervisory authorities.