November 16 (SeeNews) - Spain-based financial group BBVA said that its board of directors agreed to launch a voluntary takeover bid for the 50.15% stake it does not currently own in Turkish lender Garanti BBVA [IST:GARAN] for up to 25.7 billion lira ($2.5 billion/2.2 billion euro) in cash.
The expected compensation for shareholders accepting the offer is 12.20 lira for each share of Garanti BBVA, which represents a 34% premium over the volume-weighted average price (VWAP) of the past six months, 24% over the VWAP of the last month, and 15% over the market price as of November 12, 2021, BBVA said in a statement on Monday.
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"The transaction is positive for BBVA shareholders since it will propel the group’s growth in one of its main markets, generating a high return on the investment, with a very limited impact on capital. The price offered represents a premium of 34% over the volume-weighted average price of the past six months, which makes it very attractive for Garanti BBVA shareholders as well," BBVA also said.
The takeover bid is subject to the corresponding regulatory approvals. The bank estimates the closing of the transaction will take place during the first quarter of 2022.
Assuming that all Garanti BBVA shareholders accept the offer, and considering the profit estimated by analysts for the BBVA group and the Turkish franchise, the transaction would increase profit per share by 13.7% in 2022, and the tangible book value per share by 2.3% as of September 2021, the financial group noted. "Likewise, the maximum impact expected on the group’s CET1 capital ratio as of September 2021 would be very limited (-46 basis points)," BBVA added.
BBVA also said that the offer is subject to no conditionality and the group will be satisfied with any resulting level of ownership. In the event that not all Garanti BBVA shareholders accept the offer though BBVA exceeds a 50% stake, BBVA could increase its holding without launching a subsequent takeover bid, it added.
With a market share among private banks of 20% in loans in lira and 19% in deposits, Garanti BBVA is the main private bank in Turkey, and the largest by market capitalisation. As of September 2021, it had 21,651 employees, 5,535 ATMs, and 1,007 branch offices, according to BBVA's statement.
(1 euro = 11.5701 lira)