HDFC, CBoP to decide share-swap ratio

Mumbai Feb 24: Second largest private sector lender Housing Development Finance Corporation (HDFC) bank and Centurion Bank of Punjab (CBoP) are likely to arrive on a concrete decision on share-swap ratio early next week.

HDFC bank Chairman Deepak Parek talking to newsmen before entering the Board meeting to consider teh merger proposal said if the merger proposal gets approval, the share-swap ratio would be declared early next week after mutual confirmation by the two banks. Mr Parekh, however, declined to comment further on the merger issue, saying, ''to come at the conclusion at this stage is too early''.

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The two banks are holding their board meetings separately to discuss the merger proposal, which if materialises would be a landmark deal in the history of banking in India.

The proposed merger, which also involved a share-swap deal of worth about Rs 12,000 crore, would also provide a considerable mileage to the HDFC Bank with greater access in the northern and southern part of the country, according to official sources.

On the basis of initial calculations, a shareholder of CBoP might get one HDFC bank share for every 20 shares. However, the exact ratio would arrive only after a mutual consensus, sources said.

The scrips of HDFC closed 4.40 per cent lower at Rs 1,474.95 on Friday, while in the last three sessions it tumbled nearly 12 per cent on the bourses amidst the merger buzz. Meanwhile, Centurion shares declined by 1.14 per cent to end at Rs 56.40 on Friday. It had lodged a sharp gain on Thrusday, after the possible deal reports.

UNI