CaixaBank Shares Fall on Stock Sale to Finance Banco BPI Takeover
23 September 2016 - 8:20PM
Dow Jones News
MADRID—Shares in CaixaBank SA were down 3.7% on Friday after the
Spanish bank announced it had sold shares to fund its takeover of
Portugal's Banco BPI SA.
CaixaBank sold 585 million shares from its treasury stock, which
represents 9.9% of shares outstanding, to raise €1.32 billion
($1.48 billion), the bank said in a regulatory filing late Thursday
night. Some analysts and investors had been hoping that CaixaBank
would eschew a share sale to fund its takeover of BPI and instead
rely on stake sales.
The sale price was €2.26 a share, a 3.67% discount to the
closing price on Thursday.
The share sale comes after CaixaBank made a formal offer on
Wednesday to buy the 55% of BPI that it doesn't already own. It
would cost CaixaBank around €900 million to buy all the remaining
shares in BPI.
The share sale is the latest step in CaixaBank's drawn-out bid
to take control of BPI.
CaixaBank executives have said they think they can make BPI a
more profitable bank if they have greater control over the lender.
CaixaBank is Spain's third-largest bank by market value, but unlike
the country's two biggest banks --Banco Santander SA and Banco
Bilbao Vizcaya Argentaria SA—CaixaBank has no major presence
outside of Spain. A purchase of BPI would expand its footprint into
Portugal.
CaixaBank made the takeover offer after BPI shareholders earlier
on Wednesday agreed to remove a voting rights cap, a condition set
by the Spanish bank to move forward with the deal.
On Thursday night, CaixaBank said its capital level—under
international regulations known as "fully loaded" Basel II
criteria—would be 13.6% after the share sale if it were to acquire
all of BPI.
A bank's capital ratio is the amount of equity it holds in
relation to risk-weighted assets on its balance sheet, and it
provides a buffer against potential losses.
CaixaBank's fully loaded capital ratio was 11.5% at the end of
June.
Write to Jeannette Neumann at jeannette.neumann@wsj.com
(END) Dow Jones Newswires
September 23, 2016 06:05 ET (10:05 GMT)
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