China’s Fosun ups stake in Portugal’s largest listed bank
Fosun, China’s largest private conglomerate, raised its stake in the Portuguese bank Millennium BCP to 23.92 per cent on Tuesday, the company said, less than its 30 per cent target.
Fosun bought an initial 16.7 per cent stake in BCP, Portugal’s largest listed bank, in November for 175 million euros, through its Luxembourg-based wholly owned subsidiary, Chiado. On January 9, Fosun announced that Chiado was looking to up its stake to 30 per cent, via a rights issue held by the Portuguese bank, with the intention of increasing Fosun’s presence in both Portugal and other countries where BCP has operations.
However, BCP’s €1.33 billion rights issue was fully subscribed, with demand for new shares exceeding supply by 23 per cent.
Fosun was not the only shareholder to fail to increase its stake by as much as it had wished.
Angola’s state-owned oil company Sonangol, which is BCP’s second largest shareholder behind Fosun, had received authorisation from the European Central Bank to raise its stake to 30 per cent. However it was only able to increase its stake slightly to 15.24 per cent from 14.87 per cent.
Chinese conglomerates have been acquiring Portuguese assets since the country’s debt crisis that followed the global financial crisis. Fosun itself already owns Portugal’s leading insurer Fidelidade and its largest private health care provider Luz Saude.
“With the European economy starting to pick up, and banks having done a lot of work to clean up their balance sheets, European financial institutions look to be quite reasonably priced,” said Emma de Ronde, a partner in Hong Kong at Norton Rose Fulbright.
New rules brought in last year were seen by some analysts as restricting the scope for Chinese outbound deals in 2017. These included restricting companies from making acquisitions in industries different from those in which they themselves operate.
“For companies that already operate in the financial services sector, however, the rules will not prevent them investing in other financial institutions overseas,” said de Ronde.
After soaring to one-month highs on Monday, BCP shares plunged nearly 10 per cent on Tuesday on profit-taking and as new shares were due to start trading later this week.