Apollo, Centerbridge & Värde Make It to the Final Bidding For Popular & Citi´s Credit Cards

1/07/2014 – El Confidencial

Complex operation foreseen by Banco Popular for this year makes it to the finish line. Last week, the bank sealed the deal on the acquisition of Citibank´s credit card business together with 45 branches for over €800 million. Now, the entity chaired by Angel Ron will pack the cards together with its own and put them up for an auction in order to obtain a better price.

At the beginning, Centerbridge took the lead as the favourite but was soon joined by two other funds: Apollo and Värde Partners. Cerberus and Blackstone have been outbidded, whereas although Kennedy Wilson stays at the bidding, the odds for its winning are low.

Popular is not going to sell the entire business, though, but keep a share (around 50%) to benefit from the future upsides. Therefore, the offers will be considered for this criteria.

The operation resembles the purchase of Italian Antonveneta, a piece of ABN Amro, bought for €6.6 billion by Popular in 2007. Three weeks later, the entity sold the business to Monte dei Paschi for €9 billion, thereby gaining €2.4 billion. Afterwards, the Italian Tax Office accused the business partners of signing a pre-agreement on sharing the gains.

The total cost borne by the bank posts €340 million, however the amount shall be enlarged by additional €450 million to preserve the bank´s solvency requirements.

Citi´s credit card portfolio embraces around 1.2 million customers and over 1.1 billion cards generating a €1.4 billion debt in total. Popular will adopt the 45 offices with approximately 950 employees, as well as the €2.3 billion worth of assets and the €2 billion deposits management.


Original article: El Confidencial (by Eduardo Segovia)

Translation: AURA REE