ATHENS Greek lender Eurobank EFGr.AT said on Friday rival National Bank's (NBG) (NBGr.AT) tender offer to take it over via a share swap was fair, paving the way for completion of the deal.
Greece's banks are under pressure to merge after suffering steep losses from a sovereign debt restructuring, heavy deposit withdrawals and rising bad loans. They are short of cash and so have no option but to swap shares to do deals.
National Bank made an offer in October to buy Eurobank EFGr.AT to create the country's biggest lender, part of the consolidation to help the banking industry cope with fallout from the debt crisis.
Eurobank, advised by Barclays, Deutsche Bank and Goldman Sachs International, had said soon after the offer was launched that it would consider the proposed merger "in a constructive spirit."
On Friday, its board said in a statement that the offer was fair from a financial point of view.
NBG is offering 58 new shares for every 100 shares of Eurobank. Its voluntary tender offer will run from January 11 to February 15.
"It is now up to Eurobank shareholders to decide, taking into account the view of the board and its advisers and the rationale in NBG's prospectus," said a Eurobank official who declined to be named.
NBG, which is advised by Credit Suisse has said that Eurobank shareholders representing 43.6 percent of the bank's stock are in favor of the offer.
A merger between National and Eurobank would create the biggest banking group in terms of loans, deposits and branch networks.
Both banks hold small stakes in Hellenic Postbank (GPSr.AT) which is to be split up into a "good" business and a "bad" business after it was deemed non-viable.
(Reporting by George Georgiopoulos. Editing by Jane Merriman)