Goldman Sachs, Deutsche Bank Near £300m Deal With National Bank of Greece


The private equity arms of Goldman Sachs Group Inc (NYSE:GS) and Deutsche Bank AG (NYSE:DB) (ETR:DBK) are reportedly closing in on a £300 million deal to acquire the buyout business of the National Bank of Greece (ADR) (NYSE:NBG) (ADR).

However, a final decision on whether the deal will go ahead and its terms has yet to be made.

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PE units near agreement

Citing people familiar with ongoing developments, Bloomberg reports Goldman Sachs Asset Management and DB Private Equity are in late-stage negotiations to pay Greece’s largest lender about £300 million ($506 million) for NBGI Private Equity Ltd., about a third less than the bank originally invested.

Dimitris Spyropoulos, a spokesman for Athens-based National Bank of Greece (ADR) (NYSE:NBG), said yesterday: “We’re in the final stage, but there hasn’t been any decision”. Spokespersons for Goldman Sachs, Deutsche Bank and NBGI declined to comment.

National Bank of Greece sale to boost capital

As reported earlier, the largest Greek lender National Bank of Greece (ADR) (NYSE:NBG) recently completed an equity offering of EUR2.5 billion at EUR 2.2/ share, which gave it the ammunition to cover the requirements set by Bank of Greece. Interestingly, funds managed by George Soros, Fidelity and Pimco were also among the funds who participated in the capital raise.

Senvest Partners, a hedge fund, said trends are improving in Greece, and National Bank of Greece is well-positioned against its competition. Several Greek banks have attracted many value-oriented hedge funds in recent months, including David Einhorn, Seth Klarman, Prem Watsa and John Paulson.

Greek’s largest lender was bailed out by the Greek Government to the tune of €8.5 billion, bringing the bank to 84% public ownership. Cogent Partners has been hired by the bank to help with the divestment.

According to the Bloomberg report, NBGI’s management, headed by Chairman and Chief Executive Officer Pavlos Stellakis, is in negotiations to remain with the London-based unit after the deal is completed. The business has underperformed similar buyout firms, with 10 of its 11 funds projected to lose about 25 euros for every 100 euros invested.

Interestingly, Pavlos Stellakis has presided over the buyout arm for over a decade and received a $3.8 million bonus in 2009, the same year National Bank of Greece (ADR) (NYSE:NBG) got its first state rescue.