CAIXY Caixabank (PK)

By Patricia Kowsmann 

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 fresh takeover offer for the lender.

CaixaBank currently owns about 45% of BPI, but because of the cap, its power is roughly equivalent to that of Angolan businesswoman Isabel dos Santos, who owns 18.6% of the lender. CaixaBank had made removal of the cap a key condition for its EUR1.113-a-share offer. Late Wednesday, the Spanish bank increased its offer to EUR1.134 a share, valuing the Portuguese lender at EUR1.65 billion ($1.84 billion). Shares of the lender, which were halted from trading Wednesday, last traded Tuesday at EUR1.09.

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 EUR28 million to Unitel SA, a mobile operator controlled by Ms. dos Santos. That would raise Unitel's stake in the lender to 51.9% from 49.9%.

Small shareholder Violas Ferreira Financial SA, which owns 2.7% of BPI, 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, Angola, among countries whose debt is riskier than that of its own members.

That ruling prompted the European Central Bank to tell BPI that it must either raise more capital to cover its exposure to Angola's debt or shed the Angolan 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 shareholder vote.

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

The negotiations, however, fell apar t, and in April, CaixaBank, Spain's third-largest lender by market value, launched a bid for BPI. Tuesday's offer from BPI, if accepted by Ms. dos Santos, would 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, given the struggles of the banking sector. While Portugal didn't face a property bubble like eurozone peers Spain and Ireland, its companies have been hit hard by a sovereign-debt crisis that led the country to request a EUR78 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 15:48 ET (19:48 GMT)

Caixabank (PK) (USOTC:CAIXY)
Historical Stock Chart
From Mar 2024 to Apr 2024

Caixabank (PK) (USOTC:CAIXY)
Historical Stock Chart
From Apr 2023 to Apr 2024