Thursday, June 30, 2016

Four offers for the New Bank. Santander and BCP out of the race – Observer

The Bank of Portugal received four takeover bids for the New Bank that will be considered “in the light of the eligibility and selection criteria set out in the specifications.” In a statement, the supervisor explained that in light of this analysis, “will be making a decision on which of the routes – Strategic Sale Procedure or Market Sale procedure – will be followed to complete the process of sale of the stake held by the Resolution Fund in the New Bank “.

the Bank of Portugal does not disclose competitors for confidentiality reasons, but according to the Express, two of the major banks operating in the Portuguese market have been out of the race to the New Bank. Santander and BCP did not submit offers for the purchase of a part or all of the institution resulting from the Banco Espírito Santo, advances the newspaper. It was not possible to confirm whether the BPI or its largest shareholder, the CaixaBank, delivered proposal. It is also unclear if the offers are for the entire bank or only for some assets.

The deadline for submission of binding offers ended on Thursday at five o’clock and the president of BCP, Nuno beloved, “was not ideal” I had already signaled this week that the date, especially after the outcome of the referendum in the UK and its side effects on the markets returning to reach the bank. Also according to the Express, BCP will have written a letter to express openness to re-look at the process in certain situations.

Contacted by the Observer, Santander and BCP not comment on the information. The tender for the sale of the New Bank requires tight rules of confidentiality to competitors and in the past the Bank of Portugal was limited to disclose the number of offers without identifying who introduced them. However, the information always ends up leaving.

Among the groups identified as stakeholders were also BPI or its largest shareholder, the CaixaBank, and investment funds, including the American Apollo. The first attempt to sell the New Bank held just over a year, Santander, BPI and Apollo had offers, but only investment fund that owns Tranquility reached the final stages of negotiation with the Chinese Fosun and Anbang .

the competition was eventually canceled when the Bank of Portugal, even with the previous government, concluded that the financial offers were not satisfactory. One of the factors contributing to explain a cooling in the interest of Chinese investors in the deal was the crisis that hit the Chinese markets more acutely in the summer of last year. Now the storm comes from the west.

If you miss the sale process to strategic investors, scenario B for the sale of New Bank is the dispersion in the stock part of the capital, but this solution will have been weakened , even more, by instability and uncertainty resulting from Brexit. Entry into the capital of the institution market was already however in doubt before the outcome of the British referendum because the information presented on the bank and its future strategy were not considered sufficient by the governor of the national stock exchange.

Sales New Bank has been challenged on the left and the institution’s maintenance scenario in the state sphere has been defended by some personalities who fear the phenomenon of Hispanization banking. The government of António Costa has given priority to selling solution that was negotiated with the European Commission, a plan which provides that the operation takes place until August 2017. The statement issued Thursday by the regulated r does not admit scenario of no sale , in contrast to the position taken last year when the admitted Banco de Portugal expressly that scenario.

Formally the seller of the New Bank is the resolution fund that is shareholder, but in practice the process is conducted by the Bank of Portugal that after recognizing some limitations in the first attempt last year, strengthened the selling team with the hiring of Deustsche Bank as financial advisor and Sérgio Monteiro, the former Secretary of State of Public Works who starred in major privatization processes conducted by the PSD-CDS coalition.

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