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| Computer Translations Übersetzungen Traductions Traduzioni
Traducciones Traduções Oversettelse
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| Date |
06/10/1999 |
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BANCO SANTANDER CENTRAL HISPANO - MUNDIAL CONFIANCA - |
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The Mundial affair becomes embarrassing for Portuguese government |
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There are signs the Portuguese government is getting ready to settle the long running dispute over the ownership of Mundial Confianca and more importantly, the banks they have a controlling interest in.
The matter has become somewhat of an election liability in winning the support of the 'swing voters' who believe the matter is doing no good for Portuguese relations with the Spain or the EU, and therefore indirectly the economy. In addition Portugal is due to take-over Presidency of the EU from January and the matter would then again cause embarrassment.
In addition to local reports the London Financial Times reports the Portuguese Prime Minister, Antonio Guterres as having said he believes the matter will be resolved before the end of the year.
It was at the beginning of June that a deal was announced between Spanish Banco Santander and Central Hispano and the Portuguese insurer, Mundial Confianca. The deal had been negotiated by majority owner of Mundial, Antonio Champalimaud. He was to become a main board director of BSCH and the company was to gain 2.5% of the bank in return for BSCH gaining 40% of the insurer group. The government has little interest in the future of the insurer but have blocked the deal because of the controlling interest in the banks Banco Pinto e Sotto Mayor, Banco Totta e Acores and mortgage bank Credito Predial Portugues.
The government first blocked the deal on the grounds that adequate notice had not been given of the acquisition of a share in excess of 10% in the banks as is required under the law. This was disputed by Champalimaud who quoted details of dates and meetings with the government. The attention has now been moved to an interesting definition of financial prudency. It is argued that the split Portuguese / Spanish management could lead to inadequate controls. This argument is felt to lack credibility and the European Commission is expected to refer the matter to the European Court of Justice.
The Portuguese government has one other card it can play. Shortly after the BSCH bid the Banco Comercial Portugues placed a rival bid, thought to have been inspired by the government. Both sides have the option, if the game is freed, to place a further bid. It may be that BCP is encouraged to outbid BSCH for the privilege of ownership. Providing there is no obvious subsidy to BCP this would be a way to circumvent the EU regulations and be very hard to ever prove. Champalimaud vigorously opposed the first BCP bid, however he has recently indicated that he may bow to pressure and sell to a future BCP bid. He stated this was because of concern for other shareholders in the group. He remains most unhappy over the prospect of the BSCH link being frustrated.
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