Credit Agricole Takes 19.5% Stake in Bankinter
By Joe Ortiz
MADRID (Reuters) - French bank Credit Agricole (CAGR.PA) said on Monday it had taken a 19.5 percent stake in Spain's Bankinter (BKT.MC) 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 .SX7P, 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.
Agricole said the acquisition of a minority shareholding in Bankinter was part of its strategy aimed at strengthening its position in the Spanish and European markets.
"Bankinter is an excellent bank, and we look forward to working with its management," said Agricole Chief Executive Georges Pauget in a statement. "Our European franchise will be further strengthened by the impressive track record of Bankinter's management team."
Agricole said it had paid for the stake from its own resources and the acquisition would not have a significant effect on its core capital ratio.
Bankinter shares were sharply higher on Friday after market rumors that there could be interest in the bank, which is regarded as one of the best run in Spain.
It has a strong domestic business and a strong focus on Internet and mobile banking and has been seen as an attractive acquisition target.
Jaime Botin, from the family that runs Spain's largest bank, Santander (SAN.MC), is now Bankinter's second-biggest shareholder, with just over 16 percent.
The French bank said it had been advised on the deal by its own investment bank, Calyon.
Ahead of Monday's news, Bankinter was trading on a price to 2008 estimated earnings multiple of 15.3, compared with 7.3 for Credit Agricole and 8.8 times for the DJ Stoxx European bank index.
Bankinter's shares have been flat over the past year but have gone up strongly in response to takeover speculation, gaining nearly 20 percent in the last month.
(Editing by Will Waterman)
