Fosun not prepared to raise price in talks to buy Novo Banco-source (updated)

Productive Technologies

11/09/2015 14:41

(Recasts with Fosun comment, adds detail and background) 
    By Sergio Goncalves 
    LISBON, Sept 11 (Reuters) - China's Fosun International is 
not prepared to negotiate the purchase of Portugal's Novo Banco 
on the basis of an increased bid price as requested by the 
Portuguese central bank, a source close to the process said on 
Friday.     
    "Fosun already communicated to the Bank of Portugal that it 
is out of the question to raise the price and that it is not 
ready to negotiate on that basis," the source said. 
    Fosun was not immediately available to comment in China. 
    Portuguese business daily Diario Economico, citing sources 
close to the process, had reported Fosun's bid was too low to 
lead to a sale and that the selloff would be suspended until 
after national elections on Oct. 4. 
    The Bank of Portugal said talks were continuing and it would 
announce the results in due course. 
    Diario Economico said Fosun would only pay 1.5 billion euros 
 ($1.7 billion) for Novo Banco, the "good bank" carved out of 
the collapse last year of Banco Espirito Santo.  
    Financial sources have told Reuters that the talks with 
Fosun are complicated because Novo Banco has high risks, 
including litigation against it, that could depress the price. 
    New capital requirements by the European Central Bank could 
also dent Novo Banco's value. 
    Novo Banco was created after a 4.9 billion euro bailout of 
Banco Espirito Santo in August 2014 and authorities are eager to 
recover as much of this as possible. 
    Under the terms of the bailout, Novo Banco must be sold 
within two years, but the period can be extended by periods of 
one year if it is deemed in the public interest. 
    Talks between the central bank and China's Anbang Insurance 
Group Co, which had been the top bidder, ended without agreement 
early this month. 
    ($1 = 0.8865 euros) 
 
 (Additional reporting by Denny Thomas in Hong Kong; Writing by 
Axel Bugge; Editing by Mark Heinrich and David Holmes) 
 ((axel.bugge@thomsonreuters.com; +351-213-509-201; Reuters 
Messaging: axel.bugge.thomsonreuters.com@reuters.net)) 
 
Keywords: NOVOBANCO M&A/FOSUN