Offer for BNL
Banco Bilbao Vizcaya Argentaria SA
29 March 2005
(NOT FOR DISTRIBUTION IN OR INTO THE UNITED STATES)
On March 28, 2005 the Board of Directors of BBVA (the 'Offeror') approved the
launch of a voluntary public exchange offer (the 'Offer') for 2,655,660,664.00
ordinary shares, each of Euro 0.72 nominal value, with full dividend rights,
(the 'Shares')of Banca Nazionale del Lavoro ('BNL' or the 'Bank') currently not
held by BBVA. The Shares represent 85.675% of the BNL authorised ordinary share
capital, as set forth under the by-laws of the Bank, and 85.038% of the BNL
total authorised capital (including saving shares). The Offer is conditional
upon authorizations from relevant authorities. BBVA will file with Consob the
Offer Document in the next hours and simultaneously will ask all necessary
authorizations.
BBVA directly holds no. 444,034,181.00 BNL ordinary shares equal to 14.747 % of
the ordinary share capital subscribed as of today and to 14.634 % of the share
capital subscribed including saving shares.
The consideration for the Offer will be entirely represented by newly issued
BBVA ordinary Shares with full rights, of Euro 0.49 nominal value each. The
exchange ratio shall be: 1 newly issued BBVA ordinary share every 5 BNL ordinary
shares tendered.
The Board of Directors of BBVA also resolved to call a General Shareholders'
Meeting of BBVA to discuss and resolve on the following agenda: 1) increase in
the corporate capital of BBVA, for a nominal amount of Euro 260,254,745.17 by
issuing n. 531,132,133 new ordinary Shares, without preemptive rights for
existing BBVA shareholders, for the purpose of the exchange provided by the
present Offer and, therefore, to be subscribed via a contribution in kind; 2)
delegation of powers to the Board of Directors of BBVA, with power to
sub-delegate, to formalise, modify, interpret and execute the resolutions
adopted by such General Shareholders' Meeting of BBVA. The Board of Directors of
BBVA has also resolved to instruct the Chairman and the Company Secretary,
severally, to determine the date, place and time of such Meeting, as well as the
date of publication and the other elements of the call, taking into account the
granting of the necessary authorisations that represent conditions precedent to
the start of the Acceptance Period. The approval by BBVA's General Shareholders'
Meeting of the aforementioned capital increase is one of the conditions
precedent to the start of the Acceptance Period.
The acquisition of a controlling shareholding in BNL is consistent with the
growth strategy pursued by BBVA, aimed at improving the Group's positioning in
its core sectors of activity (retail banking in Spain, Portugal and South
America, consumer credit and corporate banking), and at creating value for its
shareholders.
BBVA believes that an expansion of the Group, also by means of geographic
diversification of the profits, will lead to the creation of one of the leading
banks in Europe, able to provide its customers with all the benefits of a global
product offering.
The Italian market, to which BBVA has attributed a strong strategic value since
becoming a shareholder of BNL during its privatisation, continues to represent
for BBVA an extremely interesting opportunity, not only for its geographical
proximity and cultural affinity with the Spanish market, but also, and
predominantly, for the significant growth potential of the banking sector in
Italy.
Thanks to its international presence and track record in integrating acquired
entities, BBVA has a strong commercial know-how - already tested with success on
similar customer bases - and significant expertise in improving management
processes. BBVA believes it can successfully drive a restructuring process of
BNL aimed at broadening and improving the quality of the product offering and
increasing operational efficiency. This restructuring process would be based on
the following key strategic initiatives:
a) strengthening of the retail network and integration of the Wholesale Banking;
b) improvement of the operational efficiency;
c) transfer to BNL of systems, processes and competences of BBVA with respect to
IT and risk management.
The completion of the Offer is conditional upon the following conditions
precedent, which the Offeror has the option to waive:
1. The Number of Shares tendered is such that, together with the number of
shares already held by BBVA, the total BBVA stake in BNL is greater than 50% of
the authorised ordinary share capital of BNL;
2. Following the date of launch of the Offer (29 March 2005) and after the
statement following the end of the Acceptance Period below, no adverse events
occur for BNL or its subsidiaries and affiliates, including resolutions by the
Board of Directors or the Shareholders' Meeting of BNL or companies of the group
to which it belongs, which are such as to significantly alter the patrimonial
and/or financial situation of the Issuer or of the group to which it belongs,
with respect to the draft annual report of BNL as of 31 December 2004, with the
exception of the operations which are regularly approved, authorised and
disclosed to the market as of the date on which the Offer is promoted;
3. the approval, by the General Meeting of the BBVA Shareholders, of the
resolutions regarding the increase of the share capital with the exclusion of
pre-emptive rights, which is necessary for the issuance of the BBVA Shares which
are being offered in exchange;
4. the obtainment, by the end of the Acceptance Period, of any other necessary
authorisation and of the approvals or registrations in Spain or in Italy or in
the European Union which may be necessary regarding the purchase of the Shares
in connection with the Offer or the issuance of BBVA shares offered in exchange,
including, but not limited to, those set forth by banking, securities market,
investments in foreign companies, competition laws and other relevant
provisions, or once that such authorisations, approvals or registrations have
been obtained, they should become invalid, without effect, or amended, or be
subject to further conditions;
5. the Acceptance Period starts before 20 June 2005 (included), expect for the
case that the non-occurrence of such condition is upon the Offeror's
responsibility;
6. the Acceptance Period ends by 30 September 2005 (included), expect for the
case that the non-occurrence of such condition is upon the Offeror's
responsibility.
Should the above conditions and events listed under point 2 above occur, or one
of the remaining conditions not be met, the Offeror reserves the right to waive
each condition and, with regards to the conditions listed under point 4, the
right to partially renounce to the condition with regard to single
authorisations. In the event that, as a result of the Offer, BBVA holds a
participation in BNL which, together with any BNL treasury shares, exceeds 90%
of the BNL ordinary share capital but is lower than 98% of the BNL ordinary
share capital, the Offeror states from this very moment its intention to launch
a Residual Public Offer pursuant to, and to the effect of, article 108 of the
Testo Unico.
If, on the other hand, following the Offer, or the Residual Public Offer, BBVA
holds a participation in BNL that, together with any BNL treasury shares,
exceeds 98% of the ordinary shares of BNL, the Offeror states from this very
moment its intention to resort to the possibility, granted by article 111 of the
Testo Unico, to purchase the remaining BNL ordinary shares within 4 months from
the end of the present Offer.
BBVA financial advisors for the purpose of this Offer are Goldman Sachs, Merrill
Lynch and Morgan Stanley. The agent responsible for the collection of the
acceptances is BNP Paribas Securities Services - Milan branch.
The BBVA Board of Directors has resolved upon the launch of a buy-back program
of own shares pursuant to the EC Regulation no. 2273/2003 of the European
Commission dated 22 December 2003, subject to the following conditions
precedent: (i) the number of shares to be purchased in the ambit of such program
shall not be higher, included the relevant net sale, than 3,5% of the stock
capital of BBVA; (ii) the price of purchase shall be compliant with article 5 of
the EC Regulation no. 2273/2003, and in any case it shall not be higher than
Euro 14,5 per share; (iii) such program shall remain into force until 30
September 2005; (iv) the program targets, pursuant to art. 3 of such Regulation,
will be the reduction of the stock capital of BBVA at the end of the program, by
means of a redemption of the acquired shares that, at the end of the program,
will remain within the portfolio of own shares of BBVA; (v) the program will be
carried out through a company of the BBVA group, named Corporacion Industrial y
de Servicios, S.L., who will be the one to issue the purchase, and as may be,
sale orders regarding the shares which are the object of the program. Such
orders will be dealt with by the brokerage department of BBVA. Effective chinese
walls will be established between the persons responsible for the use of
privileged information directly or indirectly related to BBVA and the persons
responsible for the daily trading on treasury stock of BBVA.
Excluded markets
The Offer is exclusively promoted on the Italian market, the sole regulated
market on which the Shares are negotiated. The Offer is not being made and will
not be made in or into the United States and in any other State in which such
distribution is subject to restrictions or limitations pursuant to laws in force
in such states (the 'Excluded States'). Excluded States are without limitations
United States of America, Japan, Canada and Australia. This document, and any
and all materials related to the Offer, that the Issuer or the Offeror and any
other person interested in the Offer may issue, should not be sent or otherwise
distributed in or into the United States and in the Excluded States, whether by
use of the United States of the Excluded States mail or by any means or
instrumentality of United States or of the Excluded States interstate or foreign
commerce (including, but without limitation, the mail, facsimile transmission,
telex, telephone and the Internet) or any facility of a United States national
securities exchange or Excluded States, and the Offer cannot be accepted by any
such use, means or instrumentality, in or from within the United States or
Excluded States. Accordingly, copies of this document, the Offer Document and
any related materials are not being, and must not be, sent or otherwise
distributed in or into or from the United States and Excluded States or, in
their capacities as such, to custodians, trustees or nominees holding BNL Shares
for United States and Excluded States, and persons receiving any such documents
(including custodians, nominees and trustees) must not distribute or send them
in, into or from the United States and Excluded States. Any purported acceptance
of the Offer resulting directly or indirectly from a violation of these
restrictions will be invalid. No BNL Shares are being solicited from a resident
of the United States and Excluded States and, if sent in response by a resident
of the United States and Excluded States, will not be accepted.
This document is not an offer to sell, or the solicitation of an offer to buy,
securities in the United States and Excluded States. The BBVA Shares being
offered in exchange for BNL shares have not been and will not be registered
under the United States Securities Act of 1933 (the 'US Securities Act') or
under the securities laws of any state of the United States and Excluded States,
and are offered solely outside the United States and Excluded States in offshore
transactions in compliance with Regulation S under the US Securities Act.
Consequently, no BBVA Shares delivered in exchange for BNL Shares pursuant to
the Offer may be offered, sold or delivered directly or indirectly in the United
States and Excluded States, except pursuant to an exemption from registration.
29 March, 2005
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