This excerpt taken from the NBG 6-K filed Sep 26, 2007.
Background and reasons for the Offer
National Insurance was established by NBG in 1891 as the Greek company of general insurances with the tradename THE ETHNIKI and was listed on ATHEX in 1946. The Offeror has been its largest shareholder ever since and holds shares, which represent 76.92% of National Insurances total paid-up share capital and voting rights.
National Insurance is likely to miss its profitability targets for the current year due to the contraction of prices in the general insurance sector brought about by intense competitive pressure. As a result, the management of National Insurance recognised that the targets, as set out in the 2006-2008 Business Plan, are no longer achievable for the current year. In addition, National Insurances shareholders have not received dividends over the past 3 years and its accumulated losses do not permit the distribution of dividends in the near future.
Nevertheless, in recognition of the long term growth prospects for the Greek insurance market in which National Insurance has a leading position, NBG will continue to support National Insurances effort to achieve its targets. At the same time, NBG will endeavour to further the cooperation between the distribution networks of the two companies and the sale of insurance products to the Banks client base. The realisation of such synergies and of cost cutting through the reduction of common or parallel activities of the two companies will be facilitated by an increased share holding of NBG in National Insurance.
In light of the above, NBG decided to offer National Insurances minority shareholders the opportunity for an immediate exit from their entire investment.