Unicaja May Be Moving Closer to Liberbank Takeover

(Bloomberg) --

Unicaja Banco SA is moving closer to a long-mooted takeover of Spanish rival Liberbank as consolidation gathers pace among the nation’s financial institutions.

The two banks have restarted informal talks with the help of advisers, according to people with knowledge of the matter, who asked not to be identified because the information is private. Liberbank is working with Deutsche Bank AG, the people said.

A deal to combine the lenders -- which would create the country’s seventh biggest bank -- failed last year after five months of talks, partly due to differences over the shareholding structure. However, the discussions never stopped completely and have gained new momentum after CaixaBank SA and Bankia SA reached a deal this month, one of the people said.

Unicaja has a market value of about 1.03 billion euros ($1.2 billion), while Liberbank is valued at about 691 million euros.

The two lenders declined to comment, as did Deutsche Bank.

Banking consolidation is heating up in Europe as lenders try to restore profitability hit by years of negative interest rates and sluggish economies. CaixaBank’s agreement to take over Bankia came weeks after Italy’s Intesa Sanpaolo SpA’s takeover of Unione di Banche Italiane, prompting bankers and advisers to take a closer look at other possible combinations.

Spanish lender Banco de Sabadell SA is also exploring strategic options and has been working with Goldman Sachs Group Inc. in recent months on options including a sale or merger, asset disposals or buying a smaller competitor, people with knowledge of the matter said last month.

Issues Resolved

Many of the issues that caused the Unicaja and Liberbank talks to stall have since been resolved, one of the people said. One of the key concerns was the insistence by the European Central Bank that the two lenders would have to raise capital. Both have since built up their solvency buffers and regulators have indicated that they will take a more accommodating stance on such roadblocks to help push deals over the line.

The previous talks also stalled because of differences over ownership of the new bank. Unicaja, the larger of the two, had pushed for 60% while Liberbank wanted 42%. Shareholders representing both banks agreed on a new structure late last year, a person with knowledge of the matter said late last year.

Shareholders at Liberbank include its founding savings banks as well as Corporacion Masaveu, Mexican investor Ernesto Tinajero and London-based fund manager Oceanwood Capital Management LLP. Unicaja’s main shareholder is the Fundacion Bancaria Unicaja, which owns 49.7% of the bank.

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