CaixaBank Extends Drop After Selling $1.5 Billion Shares for BPI

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  • Spanish bank sold 585 million shares to private investors
  • Shares were sold at 2.26 euros each, a 3.7 percent discount

CaixaBank SA, Spain’s third-largest lender, extended declines after selling shares for 1.3 billion euros ($1.5 billion) to fund its takeover of Portugal’s Banco BPI SA.

The company sold 585 million shares, the equivalent of a 9.9 percent stake, to private investors, CaixaBank said in a statement late Thursday. Shares were sold at 2.26 euros each, a 3.7 percent discount to their closing price.

“The capital increase is in line with expectations,” Carlos Cobo, an analyst at Haitong Bank SA with a buy recommendation on the shares, said in a note to clients. “Once the capital increase has been cleared, investors will probably focus on CaixaBank’s sounder business model and balance sheet mix versus its Spanish domestic peers.”

CaixaBank, which has been pursuing the Portuguese company for more than a year, agreed to pay about 900 million euros to buy the 55 percent of BPI it doesn’t already own. The bank increased its offer to 1.134 euros a share from 1.113 euros on Wednesday after BPI shareholders agreed to scrap voting rights limits, a key condition for the bid.

CaixaBank fell 3 percent to 2.28 euros at 9:52 a.m in Madrid after decreasing 3.1 percent on Thursday. The shares are down about 29 percent this year, putting the bank among the largest decliners in Spain’s Ibex 35 Index, which has slipped 7.2 percent.

CaixaBank is seeking to maintain a capital ratio between 11 percent and 12 percent under its current strategic plan. If the lender were to acquire all of BPI, its fully-loaded common equity Tier 1 ratio would drop to 10.8 percent after the placement, it said.

Grupo Mutua Madrilena said Friday it had become CaixaBank’s second largest shareholder, with a 2.13 percent stake, as it took part in the lender’s share sale. The Spanish insurer owns about 280 million euros of the bank’s stock.

JPMorgan Chase & Co. and Morgan Stanley were the underwriters. A spokeswoman for CaixaBank denied a share sale transaction earlier.