China’s Fosun has offered to buy almost 17 per cent of Millennium BCP, Portugal’s largest listed bank, and potentially lift its stake to 30 per cent,…

China’s Fosun has offered to buy almost 17 per cent of Millennium BCP, Portugal’s largest listed bank, and potentially lift its stake to 30 per cent, following a halving in its share price in the year to date

BCP said in a regulatory filing late on Saturday that Fosun Industrial Holdings had offered to pay Euro0.02 a share, equal to Friday’s closing price, in a private placement of 16.7 per cent of the bank’s share capital. According to the filing, Fosun was also considering increasing its shareholding to “20-30 per cent”

Fosun, one of China’s most acquisitive companies, made its Millennium BCP offer a week after it agreed to pay $1.1bn for 86 per cent of Indian drugmaker Gland Pharma. In recent years, it has also snapped up France’s Club Med and the top Portuguese insurer in Europe

Analysts deem BCP to be in need of capital and vulnerable to a takeover after its share price fell from Euro0.05 earlier this year, pushing its market value to a little over Euro1.1bn

In a recent report on Portugal’s undercapitalised banks, which are heavily burdened by bad debts, Barclays said BCP could need a capital increase of about Euro2bn

On Friday, the bank posted a Euro197.3m loss for the first half of 2016, down from a profit of Euro240.7m for the same period last year. But it said that stress tests by the European Banking Authority had shown it had sufficient capital to withstand a financial crisis. Under the tests, BCP had a common equity tier one ratio — a key measure of capital strength — of 6.1 per cent under stressed conditions, above the 5.5 per cent threshold seen as the minimum adequate level

Fosun has now offered to subscribe to a private placement, reserved solely for the Chinese group, that would give it a 16.7 per cent stake in BCP. It said it was “also considering increasing its stake through secondary market acquisitions or in the context of future capital increases” to up to 30 per cent

This offer, which is subject to regulatory approval by Portuguese and EU authorities, is conditional on Fosun being able to appoint at least two of the 20 BCP board members, and up to five members in the event of increasing its stake

BCP said it recognised “the strategic potential” of Fosun’s offer, saying it would swiftly proceed with an analysis of its “many positive aspects” before making a recommendation to its board of directors