|
Centurion Bank,
Bank of Punjab examine merger option
Our Banking
Bureau
21 June 2005  Mumbai:
Centurion Bank and Bank of Punjab have agreed in principle to merge. The
merger will take place through a share-swap deal to be decided after due diligence.
The boards of directors of the two banks met yesterday to consider the merger
proposal between the two banks.
The
two boards resolved to pursue the merger subject to satisfactory due diligence,
a fair share- swap ratio and the statutory, regulatory and corporate approvals,
including approvals of the RBI, stock exchange and the shareholders. Rana
Talwar, chairman, Centurion Bank Limited said, "We are delighted at the
opportunity the merger of Centurion Bank and Bank of Punjab creates. Both
banks have excellent franchises, which will complement each other. The combined
entity will be a powerful private sector bank with a nation-wide reach. The
merged entity will be well capitalised, have strong management team, and will
be able to achieve considerable revenue and cost synergy. The combined bank
will be full-service commercial bank with a strong presence in the retail
and SME segments." The
two boards will meet again on June 29 to consider the final terms of the merger,
a joint release from the banks said. Information about the share-swap ratio
would be available only after the next board meeting, officials said. While
Centurion Bank has a strong presence in the west and the south, the Bank of
Punjab has a strong presence in the north. A
joint press release from the two banks quotes C R Sharma, managing director
and Tejbir Singh, executive director of Bank of Punjab Ltd as saying, "Bank
of Punjab's strong franchise in North India and Centurion Bank's strong presence
in the west and south of the country would ensure that the combined entity
would emerge a winner. With the merger of the two banks the combined entity
will emerge as a stronger bank. It is also a synergistic fit in terms of product
offerings and regional presence. We are excited about the future prospects
of the combined entity." Ambit
Corporate Finance is the investment banker for the merger. KPMG India and
NM Raiji & Co are the independent valuers to determine the share swap
ratio. The
largest shareholders in Centurion Bank are Bank Muscat (25.91 per cent); Deutsche
Bank Trust Company Americas (GDR Depository) - 21.59 per cent, and Kephinance
Investment Mauritius (7.6 per cent). FIIs in toto hold 12.85 per cent. The
promoters of Bank of Punjab, have a 27.02 per cent stake and the public 48.7
per cent. Towards
end-February, it had been announced that Nova Scotia  Bank,
Bharati Tele, and ICB Financial (a Swiss FII) would be picking up 4.99 per
cent equity each in Bank of Punjab. List
of reports on Centurion Bank List
of general reports on banks List
of general reports on finance List
of reports on M&A | 
