Attica Group’s keynote deal to take full control of Hellenic Seaways (HSW), Greece’s biggest ferry company, may face regulatory hurdles.

The agreement to buy the 48.5% stake in HSW that Attica does not already own from Italy's Grimaldi Group creates a market player to dwarf any other domestically.

Attica and HSW combined would have a fleet of about 30 conventional passengerships, fast ferries and catamarans. That is about two to three times the fleet size of its biggest rivals Seajets and ANEK Lines.

“I wouldn’t be surprised if the deal is blocked,” says George Xiradakis of XRTC, a consultancy that publishes an annual review of Greece’s coastal shipping market for passengerships.

The Hellenic Competition Commission, Greece’s regulatory watchdog, has no history of thwarting big takeover deals. But it has shown an interventionist streak when it comes to coastal shipping.

In 2008, it opened an investigation into the industry over allegations that companies were colluding to gouge passengers and lowball state tenders for subsidised routes. The investigation was dropped three years later.

Conditions of sale

Greek media outlets speculate that regulators might force Attica to sell part of its fleet as a condition of allowing the deal to move forward.

Attica agreed to sell two of its ships to Grimaldi last week: the 30,900-gt Superfast XII (built 2002), which it owns; and the 4,927-gt Highspeed 7 (ex-Highspeed 5, built 2005), which is owned by HSW.

The two vessels’ combined purchase price of €99.5m exceeds the €78.5m that Attica is to spend on Grimaldi’s HSW stake.

However, the complex ships-for-share deal is still subject to regulatory and corporate approvals.

The same goes for Attica’s initial acquisition of a 50.3% stake in HSW, which was announced in August.

At that time, Attica promised to spend €30.6m in cash and 24.15 millionnew Attica shares, to be issued in a future capital increase, to gain control of the company.

The sellers in that deal were Piraeus Bank, HSW’s biggest lender and second-biggest shareholder, and minority shareholders who had doggedly resisted Grimaldi’s buyout offers.

Attica has been surprisingly coy about the landmark HSW deal — a transaction that would make it the undisputed leader in Greek coastal shipping.

Acquirers in such corporate moves are usually quick to extol the benefits they expect their companies to draw from the deals. But not Attica.

Tight-lipped

Company executives did not return calls to comment on the deal. They also failed to make any comment about it in official press releases, other than stating the facts.

Attica managers were far more outspoken last year, when they announced a relatively modest deal to set up a Moroccan subsidiary.

Attica’s public stance to the HSW takeover has been so muted, that some market watchers speculate the company may have actually been pushed into the HSW deal, possibly to get Grimaldi off HSW's back.

Piraeus Bank could have been a driving force in that manoeuvre, they muse. The lender owns 28% in Marfin Investment Group (MIG), which in turn owns 89% of Attica.

Another name mentioned is Fortress — a big US financial firm that has already bought up some of Attica’s debt, as well as some of MIG.