Bankinter’s 19.5% stake taken by Credit Agricole

Credit Agricole, the French bank announced on Monday that it had acquired a 19.5 percent stake in Spain's Bankinter for 809 million euros ($1.18 billion).

The announcement led to immediate skepticism among the analysts because the French bank paid a large amount without gaining control of the fifth largest listed bank of Spain by market capitalisation.

Credit Agricole said it has agreed to buy 14.99% of Bankinter from a group of investors in the Spanish bank at 13.60 euros per share, valuing Bankinter at 5.4 billion euros ($7.89 billion). The investors are represented by Bankinter SA's second largest shareholder, Ramchand Bhavnani.

A Madrid trader said on the deal, "There's no doubt that it (Agricole's move) will provoke a lot of speculation about the future of the medium-sized banks."

Agricole paid a 12.9 percent dividend to the closing price of 12.05 euros of Bankinter on Friday. The French bank had also bought 4.54 percent of Bankinter stock over recent months in the market, which takes its total stake to 19.53%.

Credit Agricole's purchase of that stake makes it Bankinter's largest shareholder, eclipsing Cartival SA, which has a direct stake of 16.147%.

According to Agricole, the procurement of a minority shareholding in Bankinter is part of its strategy aimed at strengthening its position in the Spanish and European markets. The French bank said that it had been advised on the deal by its own investment bank, Calyon.

Georges Pauget, chief executive of Agricole, said in a statement, "Bankinter is an excellent bank and we look forward to working with its management. Our European franchise will be further strengthened by the impressive track record of Bankinter's management team."

Agricole said it had paid for the stake from its own resources and the acquisition would not have a significant effect on its core capital ratio.

Bankinter's shares have been steady over the past year but went up strongly, gaining nearly 20 percent in the last month in response to takeover speculation. Bankinter has a sound domestic business and a dedicated focus on Internet and mobile banking and has been seen as an attractive acquisition target.

Bankinter shares opened 12.9 percent higher at 13.60 euros but fell later to finish a net 3.7 percent firmer at 12.49 euros. Credit Agricole shares finished above earlier lows, being down just 2.6 percent at 22.65 euros.