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Cerberus Cools Off Negotiations With BBVA Due To Political Climate

10 October 2017 – Eje Prime

The negotiations between Cerberus and BBVA are being cooled down by the political climate in Spain at the moment. The banking entity acknowledged a couple of weeks ago that it was holding negotiations with Cerberus Capital regarding the sale of its real estate business in Spain. Now, according to sources close to the process, the political instability could lead to a reduction in the price of that portfolio.

Conversations between the two parties were already very advanced; they just needed to agree the price, but then the events of 1 October in Cataluña threw the cat amongst the pigeons on the markets and unleashed an instability that could end up dictating the future of the operation, according to El Confidencial.

Sources at BBVA have declined to comment on how the Catalan market may affect the closure of the sale of the entity’s real estate subsidiary, but observers in the sector speculate that it could trigger a reduction in BBVA’s price expectations. Nevertheless, they don’t rule out that the entity will wait for the waters to temper before resuming the process.

The bank will need an offer of, at least, €8,760 million to be able to transfer its entire portfolio to Cerberus without recording any losses. Nevertheless, the entity indicated that it could not say whether the negotiations will end in an agreement or not, or what the terms and conditions of such an agreement might be.

Original story: Eje Prime

Translation: Carmel Drake

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