The Government is considering making a qualitative leap in the privatization process of Bankia, the largest bank rescued in Spain. After the two minority shareholdings commercialized since 2014 by the previous Executive, the Cabinet of Pedro Sánchez now contemplates giving way to a "Control participation" of the entity, when market conditions allow it to do so maximizing the recovery of public aid granted.
This was revealed yesterday by the Minister of Economy, Nadia Calviño, during his speech at an information forum organized by Europa Press in which he pointed out that "at the moment the value" of Bankia shares and the current "situation" of the Exchange "do not give reasons" to try to advance in the privatization of the public bank. Asked then what is the price threshold of the securities in which it would be comfortable to make a sale against previous transactions, the minister said that "I would not want to advance what is the level of privatize why it's not the same to sell 7% as a controlling stake " of the entity, as the government now plans to do to leave the helm in private hands.
Although there is no decision made, selling a controlling stake would theoretically allow asking for a higher price as a control premium. To carry out this operation it would be necessary to open a process to which they could opt national and foreign banks, as well as others large investors. At market price, the participation of 61.34% of the State in Bankia vale 5,330 million, but the Government aspires to a higher price. In addition, if an investor takes control of Bankia in the privatization, it would be in principle obliged to launch a takeover bid of 100%, currently valued at almost 8.7 billion.
With his allusion to the possible sale of a controlling stake, Calviño highlighted the differences with the two previous sales processes. The first, in February 2014, supposed the sale to institutional investors of 7.5% of the capital for 1,304 million, at a rate of 1.51 euros per title and a discount of 4.4%. The second, in December 2017 (already after the contrasplit which grouped every four shares into a new one) resulted in a discount of 2.71%. The State placed another 7% of Bankia 818.3 million to 4.06 euros per share.
Spain has until the end of 2019 to privatize Bankia. The Economy Minister admitted yesterday, however, that she does not rule out asking for extension of the term, like the one that the previous Executive has already achieved in Brussels, so that the adjusted of that time horizon is not used by opportunistic investors to press the price downwards. The actions of the firm, which absorbed the also rescued BMN, closed yesterday at 2.82 euros, after yielding 0.64% in the session and 29.4% so far this year.
Bankia's parent company, BFA, 100% owned by the State, has already recovered 2,122.3 million of those injected into Bankia thanks to the two sales of shares of the entity in 2014 and 2017. This is compounded by the distribution of dividends Bankia has been performing in the last four years, which has meant an accumulated disbursement of 1,160 million euros, of which 741 million have gone to BFA. Despite these funds received, BFA has not yet returned to the FROB any of the 24,069 million euros injected into the Bankia and BMN group in 2012, the year of the European rescue. The Bank of Spain estimates that 9,857 million may be recovered, although this calculation is made at the end of 2017, before the sharp drop in this year's action.