BPI BANK recommended that its shareholders turn down a formal takeover bid, worth 4.3 billion euros, from the country’s largest commercial bank, Millennium bcp. Last week, the BPI board of directors voted unanimously to reject Millennium bcp’s offer of 5.7 euros per share for the bank’s 760 million outstanding shares, and publicly declared its hostility to the bid in a statement to stock market regulator, Comissão do Mercado de Valores Mobiliários (CMVM).
The statement said that the price per share offered by Millennium bcp did not reflect the value of the bank, “taking into account the growth potential laid out in our business plan presented in (its) report”. BPI believes that its expected annual growth earnings per share will be around 15.6 per cent between 2005 and 2008.
BPI is the fifth largest bank in Portugal and the country’s third largest listed. Its main shareholders include Brazil’s Itau and Spain’s La Caixa, which each have a 16 per cent stake. Germany’s Allianz insurance group has an 8.8 per cent share.
Millennium bcp announced its intention to buy the bank for cash on March 13. If its bid is eventually successful, the bank would have a 35 per cent market share in the banking sector in Portugal and would become the largest commercial banking group ahead of state-owned Caixa Geral de Depósitos.
Market analysts were taken by surprise with Millennium bcp’s bid, as they believed the bank would continue its investment expansion abroad, in countries like Poland.