CaixaBank Takeover Target Banco BPI Draws Competing Proposal

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Banco Comercial Portugues SA said it is prepared to study the potential for a merger with fellow Portuguese lender Banco BPI SA, possibly setting the stage for a takeover battle with Spain’s CaixaBank SA.

Isabel dos Santos, an Angolan investor who is BPI’s second-largest shareholder, proposed the study in a letter to all three banks in response to CaixaBank’s recent bid for BPI. Combining Banco Comercial and BPI -- respectively Portugal’s second- and fourth-largest banks by assets -- will create the country’s biggest bank not owned by the state, said her spokesman, who asked not to be named in line with company policy.

Dos Santos’s opposition to CaixaBank’s offer risks derailing the Spanish bank’s plans to become the largest lender in the Iberian region. To secure the deal, CaixaBank must persuade BPI shareholders to scrap a 20 percent voting right limit for investors. With a stake of almost 19 percent, dos Santos’s support would be key.

CaixaBank, Spain’s third-largest bank, on Feb. 17 offered as much as 1.1 billion euros ($1.2 billion), or 1.329 euros a share, to buy out BPI investors. It said the BPI purchase will provide annual cost savings of about 130 million euros by 2017.

In Tuesday’s letter, Santoro Finance, dos Santos’s Lisbon-based holding company, said CaixaBank’s offer doesn’t accurately reflect BPI’s value and that shareholders don’t benefit enough from the savings cited by the Spanish bank. A tie-up between two Portuguese banks has more potential than creating a cross-border lender, said the spokesman for dos Santos.

Banco Comercial responded saying it was available to conduct a study if BPI is interested and if regulations permit. No decision has been made, the bank said in a regulatory filing. BPI acknowledged the letter in its own filing, without commenting. Shares in BPI and Banco Comercial, which had shot up earlier in the day on speculation dos Santos might make a move, were briefly suspended.

“It looks like a defensive move by this shareholder to try to get a higher price,” Gonzalo Lardies, who helps manage about 200 million euros of Spanish equities at Banco Madrid Gestion de Activos, said in Madrid by phone. “In theory, CaixaBank should make the next move but we are still in the phase of conjecture.”

Dos Santos, Africa’s second-wealthiest woman according to Bloomberg Billionaires Index, is the daughter of President Jose Eduardo dos Santos of Angola. This will not be the first time she has sought to block a deal in Portugal.

Last year she tried to buy Portugal Telecom SGPS SA in a bid to stop cable company Altice SA from acquiring the Portuguese assets of Brazil’s phone carrier Oi SA. She withdrew the offer under pressure from the regulator to raise the price.

Banco Comercial’s biggest shareholder is Angolan state-owned oil company Sonangol EP, with a 19 percent stake as of June 2014, according to the bank’s website. Sonangol Chief Executive Officer Francisco de Lemos said Feb. 25 the company had no plans to increase its holdings in Portuguese banking.