CAIXY Caixabank (PK)

LISBON—Shareholders of Portuguese lender Banco BPI SA on Wednesday approved the removal of a 20% voting-rights cap, paving the way for Spain's CaixaBank SA to advance with a takeover offer for the lender.

CaixaBank currently owns about 45% of BPI, but because of the cap, its power is almost equivalent to that of Angolan businesswoman Isabel dos Santos, who owns 18.6% of the lender. CaixaBank had made the voting a key condition for its â,¬1.113-a-share offer, which values BPI at €1.62 billion ($1.81 billion). Shares of the lender, which were halted from trading Wednesday, closed at €1.09.

BPI sought to woo Ms. dos Santos into accepting the cap removal by offering to give her control of the lender's Angolan unit. Late Tuesday, BPI said it was willing to sell 2% of Banco de Fomento Angola SA for €28 million to Ms. dos Santos, which would raise her stake in the lender to 51.9% from 49.9%.

Small shareholder Violas Ferreira Financial SA, which owns 2.7% of BPI, meanwhile, signaled it too had run out of options to block the CaixaBank offer, which it has complained was too low. Two previous votes had to be postponed because of court injunctions requested by Violas, mostly on technical grounds.

In a statement, BPI said the cap removal it had proposed was approved by 94% of those who voted.

CaixaBank and Ms. dos Santos have been involved in a lengthy battle over the future of BPI and Banco de Fomento after a 2014 European Union ruling placed Portugal's former colony among countries whose debt is riskier than that of its own members.

As a result, BPI's exposure to Angola's debt rose beyond a limit imposed by the European Central Bank, which has told the lender to either raise a high level of capital or shed the unit.

At one point, BPI, with CaixaBank's support, proposed spinning off the Angola unit as a free-standing company while keeping control to resolve the issue. But Ms. dos Santos, who is the daughter of Angola's president and Africa's wealthiest woman, blocked the move in a shareholders' vote.

In March, talks between both shareholders started revolving around CaixaBank buying Ms. dos Santos's stake in BPI and Ms. dos Santos taking control of Banco de Fomento.

The negotiations, however, fell apart, and in April Spain's third-largest lender by market value launched a bid for BPI. Tuesday's offer from BPI, if accepted by Ms. dos Santos, will resolve the lender's troubles with the ECB.

CaixaBank, which is looking to expand beyond its domestic borders to bolster profitability, has said it expected the deal for BPI to close in the third quarter.

For Portugal, handing BPI over to a larger lender would be a relief amid a struggling banking sector. While Portugal didn't face a property bubble like eurozone peers Spain and Ireland, its companies have been hard hit by a sovereign-debt crisis that led the country to request a €78 billion bailout in 2011. A portfolio of souring company loans, along with low interest rates, are hurting lenders' profitability and eating up their capital cushion.

Write to Patricia Kowsmann at patricia.kowsmann@wsj.com

(END) Dow Jones Newswires

September 21, 2016 09:35 ET (13:35 GMT)

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