EuroBic sale falls through

A deal which would have seen the sale of Angolan-Portuguese bank EuroBic to Spanish bank Abanca has fallen through at the 11th hour.

Abanca decided to pull out of the purchase of the bank owned by Isabel dos Santos and Fernando Teles over price disagreements.
Reports Portuguese business online news source Eco that negotiations between the two sets of shareholders, which had been underway since February following the Luanda Leaks scandal and pressure from the Bank of Portugal, have hit deadlock over the past two weeks and now Abanca has pulled out.
Luanda Leaks published by the International Consortium of Journalists earlier this year resulted in hundreds of customers removing their deposits from the bank part-owned by Angolan tycoon Isabel dos Santos who is alleged to have bought her share in EuroBic with money stolen from the Angolan State, including its oil company Sonangol.
It is estimated that EuroBic lost €600 million in deposits as a result of the fallout from the scandal.
Abanca had given a close-of-business deadline for the deal of Monday, by which time EuroBic had to agree to a final offer, but that failed to materialise.
On Tuesday afternoon, Abanca announced that “Despite having dedicated efforts and significant resources to acquire 95% of EuroBic, they were forced to abandon the deal because the agreed conditions were not met.”
The decision has already been sent to EuroBic and the Bank of Portugal. At the root of the differences was the result of due diligence carried out in recent weeks and the effects of Covid-19 on the bank’s accounts.
The result of these two factors led Abanca to drive a hard bargain over EuroBic of a non-binding nature as the deadline approached to sign the contracts and which was less than the amount originally agreed when the Memorandum of Understanding was signed.
Abanca made an initial offer of around €240 million. However, Juan Carlos Escotet, chairman of Abanca admitted that he would lower the final offer because of the results of the audit that had been carried out.
Isabel dos Santos and Fernando Teles controlled 90% of the bank, but following an assets freeze from judge Carlos Alexandre as part of the Luanda Leaks judicial investigation, Isabel dos Santos, the daughter of former president José Eduardo dos Santos, lost her voting rights as a shareholder at the bank (42.5%).
EuroBic ended 2019 with record profits of €61 million which was to a large extent down to a court of arbitration’s decision over a lawsuit involving the State and EuroBic to return €30.6 million from the sale of BPN (now EuroBic) in 2012 to EuroBic.