EuroBic and Abanca deal about to be closed

  • ECO News
  • 2 June 2020

The deal to buy EuroBic is about to be closed by Abanca, according to the information collected by ECO.

Abanca is about to finalize the purchase of EuroBic, according to information gathered by ECO. Negotiations between Abanca and EuroBic shareholders, Isabel dos Santos and Fernando Teles, have been ongoing since February, following Luanda Leaks and pressure from the Bank of Portugal, when a memorandum of understanding was signed.

The new coronavirus pandemic has delayed due diligence proceedings until after May. In recent weeks, after completing an in-depth analysis of EuroBic’s accounts and already with Fernando Teixeira dos Santos off the negotiating table, both shareholders of the Portuguese bank, which includes Isabel dos Santos’ partner Fernando Teles, and the Galician bank, are completing the deal, namely the sale price. May 31 had been set as the deadline for an agreement, but this deadline was not exactly rigid and not an obstacle to the negotiations.

The Abanca will have made an initial proposal of around 240 million euros. However, with the due diligence and impact of the pandemic, Juan Carlos Escotet, Chairman of Abanca, admitted reviewing the last proposal to be delivered to the owners of EuroBic. Therefore, the deal should be concluded for a lower amount. ECO contacted both parties, but they did not want to make any comment.

Through all this, although unofficially, the Bank of Portugal has already accepted the operation. Carlos Costa said in early March that the Abanca is “credible and with interest”. “We are not dealing with an unknown entity, it is supervised by the Bank of Spain, the Bank of Portugal and the European Central Bank,” said the governor of the Portuguese central bank. The new shareholder of EuroBic has to be approved by the ECB.

EuroBic closed 2019 with record profits of 61 million euros. The performance was largely because of a decision by the arbitration court in relation to a dispute between the bank and the Portuguese state in the sale of BPN in 2012, which contributed 30.6 million euros to EuroBic’s income.

The Portuguese bank has an important operational structure: over 1,400 employees and a network of 184 branches, most of them on the coast of the country.