(Repeats for wider distribution)
* Mulling sale of Evertec unit
* Says Evertec, other ops valued at $1 bln
* FDIC-deal in near term - analysts
* Stock jumps 27 pct on heavy volumes
(Adds analyst comments, updates stock movement)
By Anurag Kotoky
BANGALORE, April 13 Shares of Popular Inc
(BPOP.O) jumped 27 percent on heavy volume Tuesday, a day after
the company said it was raising $900 million, giving the
biggest bank in Puerto Rico ample cash to go for widely
expected regulator-backed deals.
In a regulatory filing, the company also said it was
considering a "strategic transaction" involving its merchant
banking and technology unit Evertec and some other businesses,
which could result in a sale.
The company has received a number of non-binding
indications of interest for the unit, which suggests an average
sale price for Evertec and the other businesses of about $1
billion, the company said.
"If we were to sell all of Evertec and these other
businesses for consideration of $1 billion, we would increase
our capital by approximately $750 million," the company said in
a filing with the U.S. Securities & Exchange Commission.
Cantor Fitzgerald analyst Michael Diana said Popular is
unlikely to sell the Evertec unit if it fails to win an
FDIC-backed deal. However, if it manages to buy a failed bank,
it may sell Evertec to repay federal bailout funds.
There is rising speculation in the market that the Federal
Deposit Insurance Corp (FDIC) may take over operations of at
least three of Puerto Rico's biggest banks, which are already
under cease-and-desist orders. In such a case, Popular is seen
as a strong contender to take over the failed banks.
"We believe Oriental Financial's (OFG.N) recent $100
million capital raise and these FDIC commercials, in addition
to Popular's offering, point to a consolidation of the banking
system in Puerto Rico in short order," FBR Capital Markets said
in a note Tuesday.
The brokerage initiated coverage of Puerto Rican Banks on
Monday, and added Popular to its top picks list, saying the
company is well positioned to take advantage of seemingly
imminent consolidation in the market.
B. Riley & Co analyst Joe Gladue upgraded Popular to "buy"
from "neutral" and said after the latest offering, any further
capital raise will help the company to tackle ongoing losses.
The parent of Banco Popular posted its seventh-straight
quarterly loss as the company had to work around its credit
problems to navigate the economic downturn. [ID:nSGE63B0M1]
"The trends in non-interest income and operating expenses
were not far off of our expectations, but in this environment,
a lack of bad news is good news," the analyst wrote in a note
Popular has operations in Puerto Rico, the United States,
the Caribbean, and Latin America, according to its Website. It
operates 177 branches in Puerto Rico alone.
Popular shares, which have more than tripled since hitting
a 52-week low of $1 last July, were up 20 percent at $3.65 in
afternoon trade on Nasdaq. They touched a high of $3.86 earlier
in the session.
More than 117 million shares changed hands by 1750 GMT,
compared with a 10-day moving average volume of about 15.6
(Reporting by Anurag Kotoky; Editing by Maju Samuel, Gopakumar
Warrier and Unnikrishnan Nair)