Bankinter Sells Stake to Credit Agricole

Spain's Bankinter said Monday it agreed to sell a 20 percent stake to France's Credit Agricole for 809 million euros ($1.18 billion).

Credit Agricole bought 4.5 percent of Bankinter on the open market, and reached an agreement to buy another 15 percent stake from a group of investors led by Indian financier Ramchand Bhavnani for 13.6 euros ($19.93) per share.

The purchase values Bankinter, Spain's sixth largest bank by market value, at 5.4 billion euros($7.91 billion).

Credit Agricole said its own investment bank Calyon acted as sole adviser on the transaction.

Paris-based Credit Agricole, active in Spain since 1875, has corporate and investment banking, private banking and asset management operations in the Iberian nation.

"The move underlines our interest in the Spanish retail market," Credit Agricole spokesman Alain Berry said.

Still, the French bank is ruling out further share purchases in the short term, a spokesman for Credit Agricole in Madrid said.

Faced with slow growth at home, Credit Agricole has been aggressively expanding in the past years, with large acquisitions in Italy and Spain.

Credit Agricole will seek representation on Bankinter's board of directors, spokesman Berry said. "It seems logical that Credit Agricole will indeed be represented," he added.

Bankinter's shares rose more than 20 percent last week on the Spanish market, amid speculation of a takeover.

The shares gained 1.7 percent to 12.26 euros ($17.96) on Monday.

Credit Agricole said it expects to close the purchase, which is subject to the approval of Spain's central bank, in the first quarter of 2008.

The purchase would make Credit Agricole Bankinter's largest shareholder, ahead of Jaime Botin, who has a 16.3 percent stake in the bank, according to stock market records.

Botin is the brother of Emilio Botin, chairman of Banco Santander, Spain's largest bank by market value.

In a separate regulatory filing, Bankinter said Bhavnani had informed it he was selling all of his shares in the bank and that he was also resigning his seat on its board.

Bankinter has long been the object of takeover speculation, largely the result of Bhavnani's interest in the bank. The India-born investor has a history of building up large stakes in Spanish banks and then selling them.