QNB Talks To Acquire Turkey’s Denizbank Stopped On Price

Qatar National Bank SAQ (QNBK)’s talks to acquire Denizbank AS (DENIZ), the Turkish lender put up for sale by Dexia SA (DEXB), remain stalled over price as other potential buyers, including Russia’s OAO Sberbank, express renewed interest.

QNB is still seeking a price close to Denizbank’s book value, which stood at about $2.5 billion at the end of last year, while Dexia is seeking more than 1.5 times book value.

Dexia is in discussions with buyers who had earlier considered bidding for Denizbank, the people added, including Sberbank, whose deputy chief executive officer said yesterday that his bank was looking seriously at a potential deal.
Assets on sale by European financial institutions are beginning to find buyers as the region’s sovereign debt crisis recedes and the European Central Bank injects more than 1 trillion euros ($1.3 trillion) into the banking system, easing liquidity concerns. Earlier this week, EFG Eurobank Ergasias SA (EUROB), Greece’s second-biggest lender, agreed to sell its Turkish unit for $357 million to Kuwait’s Burgan Bank SAK (BURG), following Banco Santander SA’s February deal to create Poland’s third-largest lender by buying KBC Groep NV’s Kredyt Bank unit.

Dexia, based in Paris and Brussels, put Denizbank up for sale as part of a rescue plan imposed by the French and Belgian governments when the debt crisis eroded its ability to obtain funding. The sale came amid decisions by lenders including Deutsche Bank AG (DB) and France’s Societe Generale SA (GLE) to shed more than $1 trillion in assets, loan portfolios and entire units to raise cash, according to Bloomberg data, creating a surge in available banking assets.
The sale of Denizbank, which is listed on the Istanbul bourse with a market value of 11.5 million liras ($6.4 billion), last year attracted interest from HSBC Holdings Plc (HSBA) and Sberbank, in addition to QNB. The British and Russian banks dropped out of the process over price disagreements, leaving the state-backed Qatari lender as the only credible bidder. Italy’s UniCredit SpA (UCG) said last month that it would consider a bid for Denizbank if talks with QNB fail to reach a deal.

Spokesmen for Dexia and QNB declined to comment on the Denizbank process.
Denizbank shares have surged more than 90 percent since October, following the first reports Dexia would sell its majority stake under its rescue plan; which included putting its most troubled assets into a so-called bad bank and selling profitable units to raise cash. The Turkish lender’s shares rose 2.6 percent today to close at 15.90 liras in Istanbul. The European Banking Authority told the region’s banks to raise 114.7 billion euros ($151 billion) in fresh capital in December to respond to the fall in the value of securities issued by euro-area governments. The agency also required banks to keep a core Tier 1 capital ratio of 9 percent and hold additional reserves, called a sovereign buffer, to protect against default on debt tied to weaker euro-area economies, Bloomberg reported.

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