Portugal's Banco BPI Clears Voting-Cap Hurdle, Making Way For CaixaBank Takeover
September 21 2016 - 9:50AM
Dow Jones News
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)
Copyright (c) 2016 Dow Jones & Company, Inc.
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