Credit Agricole Takes 19.5% Stake in Bankinter

By Joe Ortiz

MADRID (Reuters) - French bank Credit Agricole (CAGR.PA: Quote, Profile, Research, Stock Buzz) said on Monday it had taken a 19.5 percent stake in Spain's Bankinter (BKT.MC: Quote, Profile, Research, Stock Buzz) for 809 million euros ($1.2 billion) to reinforce its European franchise.

But as the French bank had paid a premium without securing control of Spain's fifth-largest listed bank, the market was unimpressed, sending both shares lower.

After opening up nearly 13 percent at 13.60 euros, Bankinter lost all its gains and was 3 percent lower at 11.69 euros by 1250 GMT as Credit Agricole's intervention managed to deflate takeover expectations.

"Over time, Agricole may want to acquire Bankinter, but initial feedback from both banks indicates that they (Bankinter) are not considering giving up control of the bank any time soon, and it doesn't look like CA will launch a full takeover bid," analysts at Keefe, Bruyette & Woods said in a note to clients.

Credit Agricole shares were down 3.5 percent at 22.46 euros, underperforming the DJ Stoxx European banking stocks' index , which was down 1.4 percent.

Credit Agricole said it had bought a 14.99 percent stake in Bankinter from investor Ramchand Bhavnani at 13.60 euros per share, a 12.9 percent premium to Friday's closing price, valuing the bank at 5.4 billion euros ($7.89 billion).

The French bank said it had also bought 4.54 percent in the market over recent months, making its total stake 19.53 percent.

"There's no doubt that it (Agricole's move) will provoke a lot of speculation about the future of the medium-sized banks," one trader said.