Caja Madrid acquires 83% of Florida community bank
Spain’s second biggest savings bank also plans to set up and list industrial holding company15 April 2008
MADRID - Caja Madrid, Spain's second biggest savings bank, announced Monday it was buying an 83-percent stake in City National Bank of Florida for EUR 618 million.
At the same time, Caja Madrid said it would include its stake in City National Bank within an industrial holding company it is planning to set up, which will group together interests it has in companies that it either manages or has a controlling stake.
The savings bank will float about 30 percent of the holding company, which has an estimated value of about EUR 2.5 billion. The flotation could take place at the end of this year.
Caja Madrid has an option to acquire the remaining 17 percent of City National Bank within 18 months at a price of EUR127 million.
Caja Madrid will avail itself of capital gains it garnered from the sale last year of its 10-percent stake in leading Spanish electricity company Endesa to help pay for the stake.
City National Bank is among the top -10 banks in Florida and has 19 offices in the state. The community bank booked a net profit last year of USD 68.4 million, an increase of 2 percent a year earlier. Caja Madrid is aiming to expand further in the United States by buying small banks in the south of the country.
The Spanish savings bank will include its Mexican mortgage lender Hipotecaria Su Casita in the holding company. It will also include its 15-percent interest in leading Spanish insurer Mapfre as well as stakes it holds in Mapfre subsidiaries such as Mapfre America, Mapfre America Vida, and Mapfre Internacional.
The holding company will also include other non-listed financial units such as private bank Altae, its brokerage division Caja Madrid Bolsa and its investment and pension fund managers Gesmadrid and Caja Madrid Pensiones.
However, it will not include its stakes in listed companies Iberia - which is Spain's largest airline - and the business hotel group NH Hoteles.
La Caixa, Spain's largest savings bank, listed its industrial holding company Criteria Caixa Corp on the Spanish exchanges last year. Criteria is a constituent stock of the blue-chip Ibex 35 index.
Caja Madrid aims to expand overseas to the extent of more than half of the value of its holding company being accounted for by foreign businesses by 2013.
[El Pais / A. Sim / Expatica]