CaixaBank Shares Fall on Stock Sale to Finance Banco BPI Takeover

MADRID—Shares in CaixaBank SA were down 3.7% on Friday after the Spanish bank announced it had sold shares to fund its takeover of Portugal's Banco BPI SA.

CaixaBank sold 585 million shares from its treasury stock, which represents 9.9% of shares outstanding, to raise €1.32 billion ($1.48 billion), the bank said in a regulatory filing late Thursday night. Some analysts and investors had been hoping that CaixaBank would eschew a share sale to fund its takeover of BPI and instead rely on stake sales.

The sale price was €2.26 a share, a 3.67% discount to the closing price on Thursday.

The share sale comes after CaixaBank made a formal offer on Wednesday to buy the 55% of BPI that it doesn't already own. It would cost CaixaBank around €900 million to buy all the remaining shares in BPI.

The share sale is the latest step in CaixaBank's drawn-out bid to take control of BPI.

CaixaBank executives have said they think they can make BPI a more profitable bank if they have greater control over the lender. CaixaBank is Spain's third-largest bank by market value, but unlike the country's two biggest banks --Banco Santander SA and Banco Bilbao Vizcaya Argentaria SA—CaixaBank has no major presence outside of Spain. A purchase of BPI would expand its footprint into Portugal.

CaixaBank made the takeover offer after BPI shareholders earlier on Wednesday agreed to remove a voting rights cap, a condition set by the Spanish bank to move forward with the deal.

On Thursday night, CaixaBank said its capital level—under international regulations known as "fully loaded" Basel II criteria—would be 13.6% after the share sale if it were to acquire all of BPI.

A bank's capital ratio is the amount of equity it holds in relation to risk-weighted assets on its balance sheet, and it provides a buffer against potential losses.

CaixaBank's fully loaded capital ratio was 11.5% at the end of June.

Write to Jeannette Neumann at [e-mail]

(END) Dow Jones Newswires

September 23, 2016 06:05 ET (10:05 GMT)

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