By Patricia Kowsmann 

LISBON-- Isabel dos Santos, Africa's wealthiest woman and the second-largest shareholder of Portugal's Banco BPI SA, on Monday reacted to a takeover bid for that bank by a Spanish lender by suggesting another deal instead: a merger between BPI and Banco Comercial Portugues SA, Portugal's largest bank by capitalization.

Last month, Spain's Caixabank SA offered to buy the 55.9% of BPI that it doesn't already own for EUR1.329 a share in cash. If successful, the Spanish bank would become the dominant bank across the Iberian Peninsula. Shares of BPI closed Monday at EUR1.36, suggesting Caixabank will likely have to raise its offer if it wants to convince shareholders about the deal.

Ms. dos Santos, who is the daughter of Angola's president and the second largest shareholder in BPI, has remained silent on the deal, until now.

A person familiar with the situation said BPI, Banco Comercial Portugues and Caixabank received a letter from Santoro, Ms. dos Santos vehicle that owns 18.6% of BPI, laying out the reasons why BPI and Banco Comercial Portugues should discuss a merger. Banco Comercial Portugues's largest shareholder is Angola's state oil company Sonangol Group, with close to 20%.

According to the person, the letter said the merger would form a large Portuguese bank with operations at home and in Angola, Mozambique and Poland.

A Banco Comercial Portugues spokesman declined to comment. Representatives for BPI and Caixabank weren't immediately available to comment. On Monday evening, Caixabank Chairman Isidro Fainé said negotiations between Spain's No. 3 bank and BPI shareholders were still underway. "The game has just started," he told journalists in Barcelona at a presentation.

Shares of Banco Comercial Portugues, or BCP, were up 7% at EUR0.089, while BPI shares were up 9% at EUR1.48.

Jeannette Neumann in Madrid also contributed to this article.

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

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