HDFC, Centurion Bank of Punjab Boards discuss merger issue

Mumbai, Feb 23 (UNI) The Boards of HDFC Bank, the second largest bank in the private sector, and Centurion Bank of Punjab met separately today to consider, in-principle, a merger between the two banks.

The HDFC Bank, in a release after the meetings, said both the Boards would meet again on February 25 to consider the swap ratio after receipt of the valuation reports. Another meeting of the two boards is slated on February 28 to consider the draft scheme of amalgamation and any other matters as required.

The Boards of the two banks have today resolved to pursue the merger subject to satisfactory due diligence, a fair share-swap ratio and all the requisite statutory, regulatory and corporate approvals, including those from the RBI, the stock exchanges, and the respective Boards and shareholders of both the Banks.

HDFC Bank Chairman Deepak Parekh talking to reporters before entering the Board meeting to consider the 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 and said, ''To come at a conclusion at this stage is too early''.

The Boards of the two banks met separately to consider the merger proposal, considered to be a landmark deal in the banking history of the country.

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

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 Thursday, after the possible deal reports.

UNI PP-VK NM AG1612