Business and Finance

Africa’s richest female billionaire is sending Portuguese bank shares through the roof

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Isabel dos Santos, the daughter of the president of Angola and Africa’s first female billionaire, is sending the share prices of two of Portugal’s biggest banks surging.

A source told Reuters that dos Santos wrote to the CEO of Spain’s Caixabank, suggesting a merger of the Portuguese banks Millennium BCP and Banco BPI.

Until recently dos Santos was Africa’s only female billionaire. She has been joined in that small club by Nigeria’s Folorunsho Alakija, but according to Forbes’ rankings she remains the continent’s wealthiest woman.

Caixabank already owns nearly half of Banco BPI, and it is trying to take a majority stake, but dos Santos owns nearly a fifth. A merger between the two banks was suggested back in 2007 but never saw the light of day.

According to The Wall Street Journal, dos Santos’ letter says the Caixabank attempt to take over BPI doesn’t reflect the “true value” of the bank, making a merger a better option. Of course, that is convenient for dos Santos, because a higher value would make her shares worth more money.

Both banks are both enjoying the news. As of 3:15 p.m. GMT (10:15 a.m. ET) Banco BPI shares are up 8.24% to their highest level since December, and Millennium BCP is up 3.7% to levels last seen in November.

Mergers and acquisitions often drive share prices up because wannabe owners have to persuade a large number of investors to part with their shares to take control.

The Financial Times notes that the new entity could not only be Portugal’s biggest lender, but have Angolan investors as its largest shareholders.

Here’s Peter Wise at FastFT:

Sonangol, Angola’s state oil company, is by far the biggest shareholder in BCP with 20 per cent. If a BCP-BPI merger were to go ahead, Angolan investors would probably be the biggest shareholders in the new entity.

However, a potential merger between BCP and BPI would have to clear massive regulatory hurdles, given that both BCP and BPI received state aid during Portugal’s recent bailout and that BPI is seen as a leading contender to buy Novo Banco, the “good bank” created out of the ruins of Banco Espírito Santo, which collapsed last year.

Portugal’s banks often have major business interests in Angola, which was a Portuguese colony until 1975. So Angolans are pretty used to Portuguese business interests affecting their country. But it’s not quite as often that an Angolan billionaire reaches back in the other direction.

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