Banca Civica – Take over Spanish style

A couple of months ago I looked at Spanish “Thrift conversions”, especially Banca Civica which was a potential take over candidate.

Now, the take over was finally announced by Barcelona based Caixabank, however with a significant discount to the prevailling market price:

The share valuation for Civica in the transaction is 27 percent lower than the 2.70 euro-per-share price of its initial public offering in July, in which it raised 600 million euros. CaixaBank has a market value of 12.1 billion euros

The offered 1.97 EUR is a 11% discount to the previous day closing price and equally an all time low for the Banca Civica stock since its IPO.

So this is something to keep in one’s mind: You can basically do takeovers/tender offers in Spain well below current market prices.


  • Nate,

    I have read about those Thrift conversions in Klarman’s book but never really tried them.

    But now that you remind me, it might well be worth looking at them again.


  • Have you ever looked at thrift conversions in the US? I’ve started to invest in these, they’re sort of net-net’s for banks.

    Basically the bank does an IPO and the proceeds go to the bank. So shareholders now own a bank with double the capital. In every case the thrift then trades at about 1/2 BV and most are of average profitability but extremely overcapitalized. Now that management has a profit incentive vs a mutual incentive leverage usually increases some, ROE rises and the capital is deployed. Within 3-5 years almost all of the thrifts get purchased by another bank for 1.5x BV in most cases.

    It’s an interesting market, some of the stocks are unlisted meaning no SEC filings. But since banks are highly regulated they are required to file with the FDIC quarterly, so their full filings are available for free on the FDIC website.

    I’m still getting my feet wet with this market so I haven’t done any posts on conversions yet, but there is a lot of opportunity there.

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