Abanca drops out of the deal with EuroBic

  • ECO News
  • 17 June 2020

The deal that was almost done, it turned out, fell through. The Spaniards of Abanca gave up buying Isabel dos Santos and Fernando Teles' bank for lack of agreement on the price offered.

There’s a turnaround in Abanca’s deal with EuroBic: The Spaniards dropped the deal to buy the bank led by Teixeira dos Santos. The negotiations between Abanca and EuroBic shareholders, Isabel dos Santos and Fernando Teles, had been underway since February, following Luanda Leaks and pressure from the Bank of Portugal, there was already an agreement in principle, but in the last two weeks the negotiations entered a deadlock and now Abanca announced the withdrawal of the operation.

The confirmation of the end of the deal came late on Tuesday afternoon, with Abanca announcing that “despite having dedicated significant efforts and resources to acquire 95% of EuroBic, it was forced to give up the operation since the conditions agreed for this objective were not met. The decision has already been communicated to EuroBic and Bank of Portugal.”

The basis for the divergences lies in the outcome of the due diligence carried out in recent weeks and the effects of Covid-19 on the bank’s accounts. These two effects, combined, will have led Abanca to present a proposal lower than the one made, of a non-binding nature, at the time of signing the memorandum of understanding.

The Abanca apparently made an initial proposal of around 240 million euros. However, Juan Carlos Escotet, Chairman of Abanca, had already admitted to reviewing the final proposal to be delivered to the owners of EuroBic according to the results of the audit that was underway.

Isabel dos Santos and Fernando Teles control 90% of the bank, but following a preventive seizure decided by Judge Carlos Alexandre, in the Luanda Leaks, the Angolan businesswoman and daughter of former president José Eduardo dos Santos lost her voting rights in the bank (42.5%).

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