Government encourages CGD to put in a bid for Novobanco
Portugal’s Novobanco, in which the State has a minority but substantial shareholding, is encouraging a bid from State-owned bank Caixa Geral de Depósitos in the forthcoming sale or floatation.
However, the US asset management and equity fund Lone Star, which holds the majority 75%, is interested in retaining a 20-30% share and selling the rest to a private international banking group.
In June, state-owned Caixa Geral de Depositos (CGD) CEO Paulo Macedo said the country’s largest bank was considering “all possibilities” to buy another lender to preserve its market leadership in the face of expanding foreign banks, particularly from Portugal’s larger neighbour Spain.
Lone Star is also looking at an IPO in which the bank would be floated on the Lisbon stock market Euronext Lisbon.
The Government says it will not stand in the way of CGD studying and contemplating an acquisition bid for Novobanco or bids for or from other banks.
On Friday, Portugal’s Minister of Finances, Joaquim Miranda Sarmento said; “We respect the management autonomy of CGD. CGD will make its own evaluations accordingly into the market conditions and future market developments.
“If it intends to do the evaluation, the Government will take decisions based on this evaluation”, he told CNN Portugal.
That same day Jornal Económico reported that the government is in favour of a national solution for the future of Novobanco which is currently up for sale by its shareholders Lone Star, the Resolution Fund, and the Portuguese government through its agency the Directorate-General of the Treasury and Finances, the latter of which holds 11%.
The plans that the government knows, according to Miranda Sarmento, is for the sale of 20% to 30% of Novobanco’s capital on the stock market.
However, according to the news source Expresso there are various options on the table including total sale to an investor, partial sale and retention of part by Lone Star, effective nationalization by the government via absorption into CGD (which Lone Star and/or the EU may not favour or allow) or floating the bank on the stock market.
The government is certainly not keen for another Portuguese bank to fall into Spanish hands, while it is also said that a French banking group may be interested in acquiring some of Novobanco.
And Jornal Económico has reported that Caixa, BCP and CaixaBank already have teams analyzing as possible bid for Novobanco.
CaixaBank, which owns BPI in Portugal, also has considerable experience in acquisitions and consolidations.
Both Bankinter and Abanca – both Spanish banks – have ruled out making a bid for Novobanco.