Portuguese bank BPI pushes ahead with takeover bid for Novo Banco

Portuguese bank BPI said on Friday that it would push ahead with a takeover bid for Novo Banco, the bank that emerged from the breakup of beleaguered bank Banco Espirito Santo, local media reported.

BPI, Portugal's second-largest listed bank, had already expressed interest in buying Novo Banco and had up to March 20 to present its non-binding offer, Portuguese newspaper Diario Economico reported.

According to Diario Economico, BPI is launching the bid despite Spain's Caixabank having launched a full takeover bid for BPI and having a proposal by Angolan investor Isabel dos Santos for the merger of banks BPI and Millennium BCP on the table.

Banco Espirito Santo was bailed out in August last year after a first-half net loss of 3.58 billion euros(3.86 billion U.S. dollars). The bank's former chairman Ricardo Espirito Santo Silva Salgado was arrested for alleged tax fraud and money laundering but was released after paying a 3-million-euro bail.

The bank was split into a "bad bank" which houses toxic assets and liabilities, and a "good" bank, named Novo Banco, which houses viable assets like branches, employees and senior debtors.

The Bank of Portugal recently revealed that 15 bidders for Novo Banco would pass on to the second phase of the sale. Two of the candidates were excluded because they failed to meet eligibility requirements.

China's Fosun Group formalized its interest in acquiring Novo Banco in December and is willing to pay up to 3.5 billion euros for the Novo Banco, according to local media.

Banks BPI and Santander have also expressed interest in buying the bank.

The authorities are hoping that the eventual sale of Novo Banco will pay for the state's 4.9-billion-euro bailout, however Prime Minister Pedro Passos Coelho has admitted that the sale might struggle to raise that much.(1 euro = 1.08 U.S. dollars) Enditem