CaixaBank announced its intention to make a voluntary public tender offer in cash to acquire all outstanding shares that it does not already own in Banco BPI, S.A., in which CaixaBank is already the largest shareholder with 44.1% of the share capital and four members of the board.
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The offer for Portugal's fourth largest bank by business volume, at a price of 1.329 euro per share, is 27% higher than BPI's closing share price on 16 February 2015. The offer price is equal to the weighted average price for the last 6 months, which for the purposes of Portuguese regulations, is considered the equitable price.
The offer is subject to CaixaBank receiving acceptances which will increase its shareholding in BPI over 50%, as well as the removal of the current 20% voting cap set out in BPI's bylaws.
The removal of this voting cap requires the approval of at least 75% of share capital represented at the BPI annual general meeting, to be convened for that purpose, at which CaixaBank's voting rights are limited to 20%.
The offer, which will be filed with the Portuguese Securities Market Commission (CMVM) once the relevant regulatory approvals are granted, is expected to be completed during the second quarter of 2015.
CaixaBank plans to continue to support BPI's management team which has successfully shielded BPI from the instability that has shaken the financial industry in recent years.
Furthermore, in order to help drive BPI's profitability in the Portuguese market, CaixaBank will evaluate and propose potential areas for cooperation between the two banks, seeking to generate synergies, reduce costs and find additional sources of revenues.
In addition, the current bancassurance model with Allianz Portugal will be continued. Such initiatives are expected to generate synergies which would benefit all BPI shareholders and improve the BPI's cost-to-income recurrent ratio from the 85% at the end of 2014 to 50% by 2017.
The offer is also expected to have a positive impact on CaixaBank's recurring earnings per share from the outset. The preliminary estimated impact on CaixaBank capital stands at between 80 and 140 basis points, assuming a take-up of between 5.9% and 55.9%.
In any case, CaixaBank's target is to maintain a capital ratio fully loaded CET1 above 11% after the transaction in order to continue to be among the European banks with higher solvency levels. ■