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Date	29/12/2000
Companies	BANCO DO ESTADO DE SAO PAULO - BANCO SANTANDER CENTRAL HISPANO -
Subject	BSCH bids for remaining Banespa stock

	One month after buying 30% of Banco do Estado de Sao Paulo from the Brazilian government Banco Santander Central Hispano has launched a bid for the remaining equity. The offer is a generous premium on Thursday's close, in excess of 50% on the current value of the ordinary and preferred shares at R95 per 1,000. If it gains all of the shares this will cost around €1.3bn / £800m / $1.2bn. If successful BSCH will have created around €3bn in goodwill which it states will be written off over 5 years. A further €1bn will be required in a combination of reorganisation costs, IT spend, bad debt write off and a make up of a pension shortfall according to Brazilian sources. The bid to buy the remaining equity came much sooner than had been generally expected. The sale of the government stake was highly controversial and faced many legal challenges. As well as political concerns, the Trade Unions were concerned over job losses. It is suggested by some in the sector that a number of Brazilian banks are around 100% over-staffed. The union concerns were in part for Banespa workers but more that a major staff reduction at Banespa would trigger wholesale rationalisation across the sector.
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