The Central Bank of Egypt is officially intervening in the dying NBG-Bank Audi acquisition
M&A WATCH- The CBE is officially intervening in the NBG-Bank Audi acquisition as deadline to resolve employee dispute expires: Officials from the Central Bank of Egypt (CBE) meet next week with executives from Bank Audi and the National Bank of Greece (NBG) in a bid to resolve an employee compensation dispute that has blocked the execution of the Lebanese bank’s acquisition of NBG Egypt, a source told Masrawy. According to the source, the grace period the CBE had granted the two banks to resolve the issue and complete the transaction expired last Saturday. NBG did not request an extension, which has threatened to bring the acquisition to a dead end.
Bank Audi could decide to back away from the acquisition altogether, as the due diligence it conducted is now outdated as a result of the delays, and is not willing to incur additional costs to repeat the process, the website reports. The bank is also reportedly demanding a CBE-backed agreement as a prerequisite to moving ahead with any procedures.
Background: NBG has reportedly been in talks with Bank Audi over extending its acquisition deadline by between one and six months amid an ongoing pay dispute with its employees. The employees claim that they are entitled to severance pay if the transaction goes through, as they see the acquisition being tantamount to wrongful termination under article 122 of the labor law (pdf). The employees are demanding the CBE intervene. The NBG and legal counsel at Matouk Bassiouny have told employees that no staff member will lose his or her job as the bank is rebadged to Bank Audi, so no severance is payable.