Romania's sale of its fifth largest bank CEC next week will probably attract lower offers than the government had expected after three bidders withdrew recently from the race, analysts said on Friday.
The government has postponed the CEC sale, seen as one of the last chances for investors to expand in the fast-growing Eastern European financial market, for months in the hope of getting a higher price for its oldest bank.
A recent research note by Merrill Lynch put a price tag of just under 500 million euros ($637 million) on the 69.9 percent of CEC up for sale. The government hopes the stake in the bank, known as the "peoples bank" under communism, will fetch 700 million euros.
Analysts say a lumbering sale process marred by strategy changes may have prompted the withdrawal of some players that had seen the privatisation as a chance to gain a foothold in the biggest retail market in the region after Poland.
Only four banks out of seven which submitted non-binding bids late last year remain in the race. The deadline for bids is 1400 GMT on Monday. "The intensity of the bidding race might have decreased after some players pulled out," independent banking analyst Florin Petria said.
Analysts expect Austria's Raiffeisen, Greece's EFG Eurobank and National Bank of Greece and Hungary's OTP to submit the bids for the 69.9 percent stake in CEC up for sale.
All these four banks already have investments in Romania. Analysts say this could push the bids lower as they could opt organic growth if they fail to buy CEC.
CEC, the last state bank on offer in Romania, appeals to investors because of its huge network which includes over half the country's banks branches and cover remote rural areas where billions of euros in aid will flow after EU entry in 2007 or 2008.