(Adds detail, analyst comment)
PARIS, March 18 Societe Generale,
France's No. 2 listed bank, said it would offer to buy out
minority holders of its online bank brand Boursorama,
a move designed to increase its presence in a growth sector as
high street banking declines.
European lenders like SocGen and rival BNP Paribas
are boosting their online business to counter low-cost Internet
competitors, and a drop in the numbers of clients coming into
their branches, both of which are hurting profits and forcing
them to close outlets.
BNP Paribas launched a Europe-wide online bank called Hello
Bank last year, which has 13,000 French clients. Boursorama,
which offers online broking, banking and other financial
services in France, the UK, Germany and Spain, currently has
505,000 French clients and is targeting 600,000 by the end of
this year. Both are overshadowed by ING Direct, a unit of Dutch
bank ING, which has 880,000 French clients.
"This (deal) is attractive for SocGen because it is
essentially buying a source of deposits," said Alex Koagne,
analyst at Natixis.
At end-2013 Boursorama had 4.48 billion euros in customer
deposits and 2.61 billion euros in customer loans.
Koagne noted that the deal was somewhat limited because
Spain's Caixa Group would not be tendering its stake.
SocGen already owns 56 percent of Boursorama while Caixa owns 21
SocGen said on Tuesday it would file an offer of 12 euros
($16.71) per share through France's AMF regulator for the
roughly 23 percent that is held by minorities. That's a premium
of 22 percent to Boursorama's Monday closing price of 9.83
euros, and worth a total 242 million euros ($337 million).
While some investors might have hoped for a higher bid
price, SocGen's current shareholding of 56 percent means the
offer is unlikely to face resistance, Montsegur Finance fund
manager Francois Chaulet said.
"One can always dream of a higher price...But it's difficult
(to achieve) because SocGen already has a very high stake," said
Chaulet, who owns Boursorama shares and who plans to tender them
at the offer price.
"Banks are right to be making these kinds of investments at
a time when liquidity is cheap...Boursorama has the capacity to
acquire new clients," he added.
Boursorama reported an annual loss in 2013, hurt by
writedowns on the acquisition value of assets abroad, namely its
U.K. broker unit Selftrade and German financial portal OnVista.
Boursorama pledged to keep growing loans and deposits in 2014
and to target new customer bases.
French retail banking accounted for about one-third of
SocGen's revenue in 2013, on a par with revenue derived from
SocGen's substantial retail operations abroad including Rosbank
Shares of Boursorama were suspended from trading at the
company's request Tuesday morning. SocGen's shares opened up 0.2
percent, at 44.43 euros, versus a flat STOXX Europe 600 banks
If more than 95 percent of minority investors tender their
shares, SocGen will proceed with a mandatory delisting.
($1 = 0.7180 Euros)
(Reporting by Lionel Laurent; Editing by Sophie Walker)