UPDATE 1-Millennium bcp chairman backs BPI merger, shares jump

The chairman of Millennium bcp has backed a merger proposal from smaller rival BPI and has begun urging shareholders to accept the deal,a source close to a Millennium shareholder said. "Millennium Chairman Jardim Goncalves has called oneshareholder asking him to support BPI's proposed merger," saidthe source. Goncalves' support for a merger just months after Millenniumfailed in a hostile bid for its smaller rival could turn BPI'soffer into a friendly one, increasing its chances of beingapproved by Millennium bcp shareholders. More than 75 percent of Millennium bcp shareholders have toapprove BPI's offer, which was announced on Thursday andinvolves a share swap that valued Millennium at around 11.7billion euros ($16.73 billion). Shares in Millennium bcp and smaller rival BPI both jumped more than six percent on Friday, bolsteredby anticipated synergies of a possible merger, analysts said. "We expect both stocks to perform strongly in the short termas the market prioritizes the deal's sound strategic rationaleover potential concerns about financials and weak standalonenumbers," JP Morgan said in a research note on Friday. At 0715 GMT shares in Millennium bcp traded 9.7 percenthigher at 3.50 euros, while BPI shares were up 5.22 percent at6.85 euros in high trading volume. For a story on the proposed merger click on [ID:nN25194042]

(ADDS WITH ANALYST COMMENT, SHARE, REUTERS

26 de outubro de 2007 | 18h32

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BPI/MERGER (UPDATE 1)*

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