After the publication of the three-way merger plan with Marfin Financial Group and Egnatia Bank, the Popular Bank share has followed an upward trend. Since September 20, the share has recorded gains of 10 cents (3.5%), concentrating a significant investors’ interest. The valuation of CPB share within the framework of the merger stood at £3, although the domestic analysts and the international firms gave a lower price target before the publication of the deal. In a report released on June 28, 2006, UBS had set a price target for CPB at £4.30 Buy 2. However, certain analysts believe that Laiki Group could have submitted the Public Offers to MFG and Egnatia at a later stage, when its price could be evaluated higher.

Based on the anticipated profits for 2006 (£73 million), Popular Bank is trading with a P/E ratio of 14.6, which is lower than that of Marfin and Egnatia (16.7 and 34.7 respectively). In 2006, Marfin and Egnatia expect profits of £57 million and £10.9 million respectively. For 2007 and 2008, Popular Bank is expected to enjoy profits of £84.8 million and £89.4 million respectively, MFG £63.6 million for 2007 and £70.5 million for 2008 and Egnatia £14.9 million for 2007 and £21.2 million for 2008.

Merger procedure

The three-way merger will be completed by the end of the year, after all the necessary procedures (EGM of Popular Bank, approval of PO by the supervisory authorities etc). It is worth noting that, 40% of the CPB shareholders see the upcoming merger positively.