By Jeannette Neumann and Patricia Kowsmann
Caixabank SA on Tuesday launched 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 27% 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. Fifty-percent
of the BPI shareholders must approve the takeover bid, Caixabank
said. The bank expects the deal to close by the end of the second
quarter.
Caixabank shares fell 3% to close at EUR3.98, while shares of
BPI rose 27% to close at EUR1.33.
Caixabank's offer comes as BPI considers its own bid for Novo
Banco SA, the lender that was carved out from the collapse of
Portugal's Banco EspíSHYrito Santo SA.
If Novo Banco is purchased by BPI and BPI is in turn swallowed
up by Caixabank, that would transform Caixabank into the largest
lender in Portugal, with a roughly 28% market share of assets and
loans, J.P. Morgan & Chase Co. analysts said in a research note
Tuesday.
Such a foothold in Portugal would convert Caixabank into the
dominant lender across the Iberian Peninsula.
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. and U.S., Caixabank has the greatest number of
bank branches and the largest market share within Spain.
Caixabank Chief Executive Gonzalo Gortázar told analysts during
a presentation Tuesday that 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," he 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."
Buyers interested in Novo Banco 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.
Another condition of the takeover, Caixabank said Tuesday, is
that BPI shareholders must vote to remove a rule that restricts
Caixabank to voting rights equivalent to 20% of BPI's capital even
though the Spanish bank owns 44.1% of the Portuguese lender's
capital.
"Our voting and economic rights should be aligned," Mr. Gortázar
said. For the voting-rights cap to be lifted, 75% of BPI
shareholders have to approve its removal.
One of those shareholders is Africa's wealthiest woman, Isabel
dos Santos. Ms. dos Santos is the daughter of Angola's president
and is the second-largest shareholder in BPI after Caixabank. A
company owned by Ms. dos Santos holds 18.6% of BPI's shares and
"holds the key for the Caixabank bid as it has to support the
lifting of the voting rights limit," Francisco Riquel, an analyst
with Madrid-based financial-services firm N+1 Group, said in a
research note.
BPI controls 50% of Angolan bank Banco de Fomento Angola SA. If
Caixabank's bid for BPI is successful, Mr. Riquel said, the bank is
likely to sell the Portuguese lender's stake in the Angolan bank to
the Angolan government, "leaving BPI as a pure player in
Portugal."
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% at the end of 2015.
"We are slightly concerned about Caixa's capital levels falling
to 10.4% versus (an) 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.
Like other Portuguese banks, BPI'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.
The 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 net loss in the fourth
quarter.
"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.
Write to Jeannette Neumann at jeannette.neumann@wsj.com and
Patricia Kowsmann at patricia.kowsmann@wsj.com
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