Friday, February 5, 2016

BPI shares soar 9%, one of the largest increases since the takeover of CaixaBank – Jornal de Negócios – Portugal

The market is rewarding BPI’s management proposal to end the limitation on voting rights. The actions of the bank led by Fernando Ulrich soar 9.30% to 1.022 euros. It is the third highest increase since the 17 February last year, the CaixaBank announced a takeover bid for the Portuguese bank, an operation that would fall to the ground.

On the basis of the failure of this takeover bid was lead to deshielded the statutes at the general meeting of shareholders on 17 June 2015. One of CaixaBank conditions to proceed with the takeover was that it was decided the end of the limitation of voting rights (according to the statutes of the bank, rights to vote are limited to 20%), which did not occur.

Now, the bank’s board of directors back to bring the issue of the end of the limitation on voting rights for shareholders decide. BPI’s management believes that the “bank has to have all the tools necessary to address” the challenges of changes in the domestic financial system.

positive Proposal for action

analysts CaixaBI considered in a note to investors that “this proposal would be potentially positive for bank shares over the speculative introduced in the ‘investment case’ of the bank”. Explain that “with this proposal, the board of directors tend to create better conditions for the participation of BPI in future change movements of the competitive environment (including mergers) that may occur in the national banking system.”

also, analysts at Haitong understand that “if, contrary to what occurred in June 2015, a sufficient number of shareholders support the Caixabank and remove the cap on voting rights that may be a positive catalyst for action.” If the proposal is approved, the Haitong considers that “may open the possibility of Caixabank make a new bid for BPI” and can facilitate the separation of African assets, a proposal rejected by Isabel dos Santos.

Actions are worth 23% less than in OPA

in February last year, Caixabank proposed a consideration of 1.329 euros per share in the Tender Offer to BPI. However, since lead to the end of the limitation of voting rights in the General Meeting of June 17, which condemned the offer the shares were losing value. Since that date, the BPI bonds yield 22.5%. Even with the rise in the session on Friday, worth 23% less than the value proposed by Caixabank, which holds 44.1% of the bank.

Despite the proposal of BPI’s board of directors to be be well received by the market, the expectation is that there is little chance of being realized. “The approval of same it seems unlikely at this stage. In fact, taking into account the likely opposition (as referred to by the media) of Santoro Finance (participation of 18.6%) and Violas Group (2.6%) and noting that the amendment in question requires approval by at least 75% percent of the votes cast, its success appears to have a low probability to this date, “considers CaixaBI.


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