Banco BPI is coming to the defense of the enbattled Banco Millennium BCP with a proposal to create a large new bank which can dominate the small Portuguese market and have a significant profile in Europe and elsewhere.
On 25-Oct-2007, a new attempt at a merger in Portuguese banking comes with Banco BPI proposing a share-swap and merger with Banco Millennium BCP which is valid until 15-Nov-07.
Banco BPI resisted successfully as target in a failed hostile takeover attempt by Millennium BCP, and now becomes white knight in defense of its bidder.
Driving this potential merger is the potential threat of another hostile takeover from Spanish banks. With the merger, that threat would be reduced. In fact, the Spanish bank La Caixa, which currently owns 25% of Banco BPI, would be diluted to less than 10% in the new Banco Millennium BPI.