Government supports BCP in search for strategic shareholders if Fosun sells

The Chinese conglomerate Fosun could theoretically sell some or all of its 20.45% stake in the Portuguese bank Millennium BCP.

The group has invested around €700 million in BCP over the past ten years but may now be set to exit with a capital gain of around €2.4 billion – plus €260 million in dividends.

According to information obtained by Jornal Económico, there is a “gentleman’s agreement” between BCP and the Government that, in the event of a significant change in shareholders, the bank will keep the State informed.

This is primarily because the Government wants to ensure that the largest private Portuguese bank does not end up in the hands of “undesirable shareholders”.

Undesirable shareholders would mean Spanish banks which already have a large participation in Portugal’s banking system.

Portugal’s Finances Minister, Joaquim Miranda Sarmento seeks to prevent Spanish banks — which currently represent about a third of the Portuguese banking market—from increasing their market share in Portugal. The minister’s opinion was expressed during the sale of Novobanco and has not changed.

Joaquim Miranda Sarmento believes that “it would be good for the Portuguese banking market if the Spanish presence, against which we naturally have no opposition, did not increase.”

A source explained that BCP is trying to find an alternative to avoid encountering an “undesirable” shareholder and that the Government supports this strategy. However, nothing concrete has yet been decided because, regarding the Chinese, “you never know what they’ll do tomorrow.” He said.

Potential buyers for a 20% stake in BCP would primarily be institutional investors. However, this would require accelerated book building (ABB), which would imply a discount that the Chinese seem unwilling to accept. Nevertheless, debt pressures could lead them to change their position.

Source: Jornal Económico, Credits: BPC