Blackstone to Take Majority Stake in Spanish Lender's Real-Estate Portfolio
August 08 2017 - 2:14PM
Dow Jones News
By Jeannette Neumann
MADRID -- Blackstone Group LP said it has agreed to acquire a
majority stake in rescued Spanish lender Banco Popular Español SA's
real-estate portfolio, a vote of confidence by the U.S. asset
manager in Spain's robustly recovering economy.
Blackstone said Tuesday it will take a 51% stake in a newly
created company that will include approximately EUR30 billion
($35.2 billion) worth of real-estate assets transferred from Banco
Popular and will also include the bank's real-estate management
company, called Aliseda.
Banco Popular was rescued by European Union and Spanish
authorities in June after a bank run earlier this summer and sold
to Banco Santander SA for a token EUR1.
Banco Popular had been a weak link in the Spanish banking system
since the country's property boom went bust starting in 2008. The
lender had been unable to make enough headway shedding its mountain
of foreclosures, undeveloped land and bad loans.
Santander's stake sale to Blackstone is an additional and
important step as the bank seeks to clean up Banco Popular and
focus on its core business of selling loans and other products to
individuals and businesses, rather than managing billions in
troubled real-estate assets.
Banco Popular's EUR30 billion in real-estate assets had been
written down to approximately EUR10 billion, Blackstone and
Santander said in statements. Blackstone will manage the new
company and Banco Popular will own the remaining 49% stake.
"This significant investment reflects our continued confidence
in the robust recovery of the Spanish economy," Jonathan Gray,
Blackstone's global head of real estate, said in a statement.
Since emerging from recession in 2013, Spain's economy has
expanded more strongly than European peers. The country's annual
economic growth rate is expected to once again top 3% this year.
Real-estate prices in major Spanish cities such as Madrid and
Barcelona have been rising, although in some of the less-populated
areas of the country prices are still falling.
Blackstone and Santander didn't disclose the price paid for the
assets.
Blackstone's offer, the companies added, topped those made by
two other unnamed investment firms. The agreement was confirmed
after European Union competition authorities formally approved
Santander's acquisition of Banco Popular earlier Tuesday.
Santander said the sale to Blackstone doesn't trigger a material
capital gain or loss for the bank. The deal will boost Santander's
capital ratio by 0.12 percentage point under international
regulations known as "fully loaded" Basel III criteria, the bank
said. Santander's capital ratio was 10.72% as of early June and the
bank aims to have a "fully loaded" ratio of above 11% in 2018.
The transaction is expected to close in the first quarter of
2018.
Write to Jeannette Neumann at jeannette.neumann@wsj.com
(END) Dow Jones Newswires
August 08, 2017 13:59 ET (17:59 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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