February 2008
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HDFC Bank-CBoP merger on cards?

Though both HDFC Bank and Centurion Bank of Punjab (CBoP) have denied any M&A talks, reports suggest that a mega merger between two of the leading private sector banks is on the cards.

A financial daily has even stated that the Boards of Directors of the two Mumbai-based private banks are scheduled to meet on Saturday to discuss modalities of the proposed merger. HDFC Bank is likely to acquire its smaller rival in an all-stock deal worth more than Rs100bn, the business newspaper reports.

The deal could be carried out at Rs57 per CBoP share, says the financial daily.

The newspaper adds further that on Wednesday, officials of both the banks were huddled in a closed-door meeting with a leading investment banker to thrash out the share-swap deal.

It may be recalled that the same newspaper had reported on Feb. 13 that Rana Talwar’s Sabre Capital, which has the management control of CBoP is planning to cash out. Sabre Capital is in talks with financial institutions and large banks for a possible merger, the paper had said.

According to the daily, CBoP is believed to have held merger talks with Infrastructure Development & Finance Corporation (IDFC) and that HDFC Bank and ICICI Bank were also interested in buying the bank.

The business daily reports today that this is the second time after almost six years that HDFC Bank and CBoP are discussing a merger. The last time the talks had fallen through on differences over valuations.

Meanwhile, in a communiqué to the exchanges yesterday, HDFC Bank said that presently there is no such proposal for the consideration of the Board of Directors of the bank, while CBoP said it would not like to comment on the matter.

Source: India Infoline

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