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| Date |
21/11/2000 |
| Companies
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BANCO DO ESTADO DE SAO PAULO - BANCO SANTANDER CENTRAL HISPANO - |
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BSCH wins auction to buy control of Banespa |
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Banco Santander Central Hispano has won the auction to buy 30% of the total equity, though 60% of the voting shares, in Banco do Estado de Sao Paulo. The auction continued to surprise to the very end. From the early multitude of bidders who had registered and were approved to bid, all but three withdrew and all of those withdrawing did so in the last week before the sale. The three who bid were BSCH, Banco Bradesco and Unibanco. After talk that BSCH would bid conservatively it in fact bid R$7.05bn (€4.2bn £2.5bn $3.6bn). The bid was R$4.95bn, or 3.3 times greater than the next highest bid.
The price paid concerned shareholders of BSCH and the share price fell 7%. One of the smaller rating agencies, Fitch also put the bank on Credit Watch Negative. Fitch stated the buy meant the bank now had more than a third of assets invested in South America, hence increasing its risk profile. Banespa staff were striking on the day of the auction and the trade union representing staff say it will continue the legal challenge against the sale. Staff and union fear major job cuts as a result of the sale.
BSCH stated the buy was an expression of confidence in Brazil. The banks remaining to be privatised in Brazil are very much smaller than Banespa. Banespa is located in Sao Paulo, one of the wealthiest of the Brazilian states.
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