LONDON May 7 Generali's private bank
BSI attracted bids below its estimated 2.3 billion Swiss francs
($2.5 billion) book value, four people familiar with the
situation said on Tuesday.
A consortium made up of Spanish lender Bankinter
and U.S. investment fund Apollo Global Management is
seen as the frontrunner to buy BSI, although it offered
"substantially less" than the insurer's estimate in 2012 of its
worth, two of the people with direct knowledge of the matter
That places Generali, which had set an April 30 final
deadline for bids, in a tough situation as it needs to raise
money but doesn't want to sell assets too cheaply.
Italy's Generali, which built up BSI through a series of
acquisitions before the financial crisis hit, has been trying to
sell BSI for more than two years, all the sources said. It is
now left with two options: selling BSI for less than it thinks
is its underlying value, or calling the sale off.
New Chief Executive Mario Greco is under pressure to raise 4
billion euros from non-core asset sales to shore up capital and
restore value after long-standing CEO Giovanni Perissinotti was
ousted by disappointed investors.
It is also selling its life reinsurance business in the U.S.
in a deal worth between $800 million and $1 billion.
Generali, Bankinter and Apollo declined to comment.
Swiss private bank Safra and Chinese investment fund Hony
Capital had earlier expressed an interest for BSI. It is however
not clear if they are still interested, the sources said.
Safra declined to comment while Hony Capital was not
immediately available for comment.
Generali could decide to call off the sale and explore other
options such as a public listing of BSI, one of the sources
"This would buy them time in the hope BSI will post better
results in the next quarter", the source said.
Bankinter is one of Spain's healthier banks, with less
exposure than others to a damaging property boom and bust, which
ultimately led Spain to ask Europe for a 40 billion euro bank
Bankinter still had to team up with a financial player to be
able to bid for BSI, two of the people said. The bank announced
on Monday it would seek to raise an additional 94 million euros
in capital to meet new European solvency ratios.
Bankinter was also interested in acquiring Belgian bank
KBC's private bank KBL but lost it to Qatari-backed Luxembourg
firm Precision Capital in 2011, one of the people said.
Japanese firms Mizuho Bank, Sumitomo Corp
and players in Qatar and Abu Dhabi have also shown
interest in BSI, but had not made offers by the deadline, all
the sources said.