CaixaBank Sells Shares for $1.5 Billion to Fund BPI Deal

(Bloomberg) -- CaixaBank SA, Spain’s third-largest lender, sold shares for 1.3 billion euros ($1.5 billion) to fund its takeover of Portugal’s Banco BPI SA.

The company sold 585 million shares, the equivalent of a 9.9 percent stake, to private investors, CaixaBank said in a statement late Thursday. Shares were sold at 2.26 euros each, a 3.7 percent discount to their closing price.

CaixaBank, which has been trying to buy the Portuguese company for more than a year, agreed to pay about 900 million euros to buy the 55 percent of BPI it doesn’t already own. The bank increased its offer to 1.134 euros a share from 1.113 euros on Wednesday after BPI shareholders agreed to scrap voting rights limits, a key condition for the bid and one that made the offer mandatory.

JPMorgan Chase & Co. and Morgan Stanley were the underwriters. A spokeswoman for CaixaBank denied a share sale transaction earlier.

The shares were originally acquired from Criteria Caixa SA under an asset swap program announced in December, the lender said in the statement. The placement is aimed at boosting the company’s capital ratio.

The bank’s common equity Tier 1 ratio, a measure of financial strength, stood at 11.5 percent on a fully loaded basis at the end of June. The European Central Bank and the Bank of Spain require CaixaBank to maintain a ratio of at least 9.5 percent.

If CaixaBank were to acquire all of BPI, its fully-loaded CET1 ratio after the placement would be 13.6 percent, the bank said.

CaixaBank’s stock had declined 3.1 percent to 2.35 euros before they were halted in Madrid on Thursday, giving the company a market value of 13.9 billion euros. The suspension on company’s shares, which have dropped 27 percent this year, will be lifted on Friday.

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