Fosun has offered to buy almost 17 per cent of Millennium BCP,
Portugal’s largest listed bank, and potentially lift its stake to 30 per
cent, following a halving in its share price in the year to date.
BCP said in a regulatory filing late on Saturday that Fosun Industrial
Holdings had offered to pay Euro0.02 a share, equal to Friday’s closing
price, in a private placement of 16.7 per cent of the bank’s share
capital. According to the filing, Fosun was also considering increasing
its shareholding to “20-30 per cent”.
Fosun, one of China’s most acquisitive companies, made its Millennium
BCP offer a week after it agreed to pay $1.1bn for 86 per cent of Indian
drugmaker Gland Pharma. In recent years, it has also snapped up France’s
Club Med and the top Portuguese insurer in Europe.
On Friday, the bank posted a Euro197.3m loss for the first half of 2016,
down from a profit of Euro240.7m for the same period last year. But it
said that stress tests by the European Banking Authority had shown it
had sufficient capital to withstand a financial crisis. Under the tests,
BCP had a common equity tier one ratio — a key measure of capital
strength — of 6.1 per cent under stressed conditions, above the 5.5 per
cent threshold seen as the minimum adequate level.
Fosun has now offered to subscribe to a private placement, reserved
solely for the Chinese group, that would give it a 16.7 per cent stake
in BCP. It said it was “also considering increasing its stake through
secondary market acquisitions or in the context of future capital
increases” to up to 30 per cent.
This offer, which is subject to regulatory approval by Portuguese and EU
authorities, is conditional on Fosun being able to appoint at least two
of the 20 BCP board members, and up to five members in the event of
increasing its stake.
BCP said it recognised “the strategic potential” of Fosun’s offer,
saying it would swiftly proceed with an analysis of its “many positive
aspects” before making a recommendation to its board of directors.