By Jeannette Neumann in Madrid and Patricia Kowsmann in Lisbon
MADRID-- Caixabank SA on Tuesday said it was launching a
takeover bid for the 55.9% of Portuguese lender Banco BPI SA that
it doesn't already own, as the Spanish lender seeks to become the
dominant bank across the Iberian Peninsula.
Caixabank, Spain's third-largest lender by market value, said it
would pay EUR1.329 a share in cash, representing a 28% premium to
BPI's closing share price Monday. The price means Caixabank could
spend as much as EUR1.09 billion ($1.24 billion) to purchase
Portugal's No. 4 bank in terms of assets and loans.
Caixabank shares fell 1.4% to EUR4.05 in morning European
trading, while shares of BPI rose almost 26% to EUR1.31.
The Spanish bank said 50% of the Portuguese lender's
shareholders must approve the takeover bid. BPI's shareholders must
also vote to remove a rule that restricts Caixabank to voting
rights equivalent to 20% of BPI's capital.
"Our voting and economic rights should be aligned," Caixabank
Chief Executive Gonzalo Gortázar told analysts during a
presentation Tuesday morning. "It's a precondition for this
transaction to go ahead." For the voting-rights cap to be lifted,
75% of BPI shareholders have to approve its removal. Caixabank
expects the deal to close by the end of the second quarter, Mr.
Gortázar said.
Like other Portuguese banks, BP's profitability has been hurt by
a severe downturn in the country. In 2011, the government was
forced to request a bailout from European Union peers and the
International Monetary Fund.
Recession led to a rise in souring loans at lenders. BPI,
however, has been among the most resilient. Portugal's economy is
now recovering, and analysts say BPI should be profitable again
this year. It posted a EUR47.3 million fourth-quarter net loss.
"We are bullish on the medium- and long-term prospects of
Portugal, even though there is a lot of work to be done, like in
Spain," Mr. Gortázar said.
BPI has expressed interest in bidding for Novo Banco, the lender
that was carved out from the collapse Portugal's Banco Espírito
Santo.
If successful, that would catapult BPI to become the largest
lender in Portugal. While interested buyers haven't submitted
formal offers yet, the Bank of Portugal is hoping for a purchase
price as close as possible to the EUR4.9 billion that had to be
injected into the bank through a resolution fund.
For Caixabank, a purchase of BPI and Novo Banco would solidify
its role as the Spanish bank with the greatest presence in Portugal
and across the Iberian Peninsula.
Caixabank CEO Mr. Gortázar said the takeover bid for BPI makes
sense regardless of whether the Portuguese lender later makes a
move to purchase Novo Banco. "We are presenting this proposal today
because it makes sense on its own," Mr. Gortázar said. "It's the
right move for Caixabank. It's the right move for BPI. And that's
true irrespective of the possibility of Novo Banco being sold."
However, Mr. Gortázar said that BPI should analyze a purchase of
Novo Banco. He also said that given Caixabank's current ownership
and voting rights, the bank would be reluctant to support a capital
increase by BPI to fund a bid for Novo Banco, since that could
dilute Caixabank's current stake.
"The reality is that if we reach a situation in which BPI wants
to bid for Novo Banco, but we have a voting cap limitation and a
44% stake, it's going to be very difficult, very difficult, for us
as Caixabank to support such a bid," Mr. Gortázar said. "We could
be diluted," he added, "and it is not our strategy in
Portugal."
While Spanish rivals Banco Santander SA and Banco Bilbao Vizcaya
Argentaria SA are larger than Caixabank in terms of market value,
partly because of their presence in Latin America and other markets
such as the U.K., Caixabank has the greatest number of bank
branches and the largest market share within Spain.
Caixabank said in a regulatory filing Tuesday morning that a
purchase of BPI would chip away at its "fully loaded" capital ratio
by 0.8 to 1.4 percentage points, depending on the level of
shareholder acceptance of the deal.
Assuming 75% of shareholders approve the deal, that would
trigger a 1.1 percentage point decrease in its capital ratio to
10.4% based on December 2014 figures, Caixabank executives said
Tuesday.
The bank said it plans to have a fully loaded capital ratio,
which are the requirements under the latest regulatory guidelines,
above 11% after the deal is complete. But executives declined to
provide details on how it would close the gap and reach that level
from a 10.4% ratio. Caixabank is holding an investor day in the
beginning of March, where analysts are anticipating more
details.
"We are slightly concerned about Caixa's capital levels falling
to 10.4% versus [a] 11% target," Citigroup analyst Stefan Nedialkov
wrote in a research note Tuesday.
Mr. Nedialkov said Caixabank might raise capital to plug the
gap. Caixabank executives didn't rule out that possibility.
Write to Jeannette Neumann at jeannette.neumann@wsj.com and
Patricia Kowsmann at patricia.kowsmann@wsj.com
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