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Hypo near Austrian deal
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July 21, 2000: 7:12 a.m. ET
Bank Austria steps up talks toward deal with German No. 2 HypoVereinsbank
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LONDON (CNNfn) - Talks between HypoVereinsbank AG, Germany's second-largest bank, and Austrian industry leader Bank Austria AG have entered a decisive phase and a cooperation or a takeover could be expected within days or weeks, a banking source told Reuters Friday.
The banks are scheduled to hold internal meetings Friday and Saturday, which could determine how rapidly they can strike a deal, the Wall Street Journal reported, citing people familiar with the matter. The newspaper said obstacles remained but maintained the chances of a deal were good.
"It is common knowledge that we have been considering partnerships, but we don't comment on market rumors," said Bank Austria spokesman Martin Hehemann, adding, 
A merged bank would have a market value of about $30 billion and assets valued at more than $650 billion.
It would be the latest in a series of consolidation moves in the European banking industry, as banks come under pressure from the rise of online banking and low profitability in retail banking services.
Bank Austria's major shareholder is the holding company AVZ, whose primary asset is its stake in the bank. Officials from the city of Vienna are members of the supervisory board. A buyout by HypoVereinsbank could force Bank Austria to drop its legal backing by the city, the Journal said.
Bank Austria has about 2 trillion Austrian schillings ($135 billion) in assets and is one of the biggest banking networks in central Europe. The bank has about a 20-25 percent market share in its home market.
In early afternoon trading on the Vienna stock exchange, shares of Bank Austria were up  2.15, or 4.2 percent, at 53.15, boosting its total market value nearly 6.1 billion ($5.7 billion), based on 114 million shares outstanding. About 55 percent of the shares are in freely traded.
In Frankfurt shares of HypoVereinsbank (FHVM) rose 1.3, or 1.9 percent, to 69.05, putting it among the top gainers in the Xetra Dax index Friday. 
-- from staff and wire reports
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