Reuters forces Raiffeisen`s hand twice on merger plans

Shares in Raiffeisen International, eastern Europes No.2 lender, extended their decline and ended down 5.7 percent on Feb 25 after Reuters reported late in the session that merger plans with its parent RZB had progressed further than the company had said publicly. Citing a confidential internal memo, Reuters revealed that managements of Raiffeisen and RZB had already started to prepare the deal and aimed for a formal go-ahead within weeks. The memo included tentative valuations for the deal and portrayed it as effectively without alternative. This added to investor ire over the surprise merger, plans for which had been revealed earlier in the week. Until late into the evening, analysts called and emailed with further questions about the story. On Feb 25, Raiffeisen rushed to bring forward to Feb 26 morning a press conference about its plans, after having sent out invitations for March 1 shortly before the Reuters story was published. It also reported preliminary full-year results on the evening of Feb 25, a month ahead of schedule. It was the second time that week that Reuters forced Raiffeisen to show its hand. According to the memo, Mondays surprise revelation that it was considering the RZB/Raiffeisen International merger pre-empted a Reuters story saying so. On Feb. 22, Reuters asked PR for a comment about very concrete, factually correct information relating to a possible merger, the memo said. As Reuters information was accurate, RI was forced to counter market speculation by actively communicating.`