Shares of Dena Bank and Vijaya Bank fell sharply Thursday, with the former tumbling up to 20 per cent after the Cabinet approved their amalgamation with Bank of Baroda.
The scrip of Dena Bank plummeted 19.77 per cent to Rs 14.40 on BSE. Shares of Vijaya Bank plunged 7.44 per cent to Rs 47.25.
The scrip of Bank of Baroda, however, gained 3.30 per cent to Rs 123.35.
Paving the way for the first ever-three way merger of public sector lenders, the Cabinet Wednesday approved amalgamation of Dena Bank and Vijaya Bank with Bank of Baroda (BoB), a move that would create the country's third largest lender.
The boards of the three banks have also cleared the share-swap ratio for the proposed amalgamation.
As per the Scheme of Amalgamation announced by BoB, shareholders of Vijaya Bank would get 402 equity shares of BoB for every 1,000 shares held in the bank.
In case of Dena Bank, the shareholders would get 110 shares of BoB for every 1,000 shares owned in the bank.