Eurobank merged with absorbtion with The Greek Progress Fund | Eurobank
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Eurobank merged with absorbtion with The Greek Progress Fund

The management teams of EFG Eurobank Ergasias (EFG Eurobank) and of The Greek Progress Fund closed-end investment company announce their intention to merge, whereby EFG Eurobank will absorb The Greek Progress Fund under the following two-phase process:
The management teams of EFG Eurobank Ergasias (EFG Eurobank) and of The Greek Progress Fund closed-end investment company announce their intention to merge, whereby EFG Eurobank will absorb The Greek Progress Fund under the following two-phase process:
1. The Greek Progress Fund will proceed with a rights issue of three (3) new shares for each two (2) existing shares at €2.69 per share – this share capital increase amounts to €130 million. The issue price represents a discount of 22% on the share’s closing price on the Athens Stock Exchange as of yesterday. The Board of Directors of The Greek Progress Fund decided, yesterday, to propose this share capital increase to the General Assembly of the company which will convene on 4 July 2005. EFG Eurobank has committed to subscribe for any unallocated shares of the rights issue.
2. Following completion of the share capital increase, EFG Eurobank will absorb The Greek Progress Fund at a share exchange ratio of 7.9 Greek Progress Fund shares for each EFG Eurobank share.
The Greek Progress Fund is a closed-end investment company, listed on the Main Market of the Athens Stock Exchange (ASE). Its portfolio consists mainly of ASE-listed shares and to a lesser extent of bonds, mutual funds’ units, and non-listed shares.
Recently, almost all closed-end funds have been trading at considerable discounts to their net asset value. This also applied for The Greek Progress Fund, which has been trading at a discount of approximately 20%, despite its superior portfolio performance which, in 2004, had it ranked first among the 20 domestic closed-end funds and despite the support of EFG Eurobank, which more than doubled its participation in the company during 2005, to reach 48.4%. Through this merger, the shareholders of The Greek Progress Fund are offered the opportunity to exchange their shares with shares of EFG Eurobank, one of the largest, by market capitalization, companies listed on the ASE, with considerable weight in market indices, high liquidity and prospects.
As a result of the merger, the successful investment strategy followed to-date by The Greek Progress Fund management team will be incorporated in the investment portfolio and the risk management system of EFG Eurobank, achieving cost synergies. More specifically, The Greek Progress Fund equity portfolio will be incorporated within EFG Eurobank’s proprietary equity portfolio.
In addition, the merger will support EFG Eurobank’s capital adequacy, allowing further business development.
Based on the average share closing price of EFG Eurobank over the last month (€24.77), the proposed share exchange ratio values the existing (pre-share capital increase) shares of The Greek Progress Fund at €3.80. This valuation represents a premium of 13% over The Greek Progress Fund’s average share closing price during the last month and a discount of 9% on The Greek Progress Fund’s average net asset value (NAV) during the same period. Based on yesterday’s (9.6.2005) share closing price of EFG Eurobank (€25.28), the proposed share exchange ratio values the shares of The Greek Progress Fund at €3.97, a valuation that represents a premium of 15% on yesterday’s share closing price of The Greek Progress Fund and a discount of 6% on its NAV.
Please note that The Greek Progress Fund shareholders will be eligible for EFG Eurobank’s dividend for fiscal year 2005, as they will become EFG Eurobank shareholders.
Completion of the merger is subject to the required approvals of the Boards of Directors and of the General Assemblies of the 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.