Citigroup still plans to go over for its Mexican retail unit even after receiving a new offer from the Mining and Transportation conglomerate Grupo México, Citi said in a statement on Monday.
The competitive offer of Grupo México arrives after Citi announced last month that it would sell a 25% participation in Banamex to the local billionaire Fernando Chico Pardo, who presides over the ASUR airport operator, 0.8 times its accounting value.
“We maintain our commitment to make the most of Banamex’s value for our shareholders, and the agreement we announced with Fernando Chico Pardo and the proposed initial public offer remain our favorite way to achieve it,” said the bank.
“Of course, we will review the offer of Grupo México with responsibility and consider, among other risk factors, the ability to obtain the necessary regulatory approvals and the certainty of closing the proposed transaction,” he said.
Citi will also probe the main Mexican investors in the coming months to buy minor minorities than Pardo, said last month.
Grupo México, controlled by Germán Larrea, offers to buy the CITI retail unit more than two years after discarding its previous plans. At that time, Larrea withdrew the offer because the tensions with the government of then President Andrés Manuel López Obrador led both parties to leave the agreement.
According to its offer, Grupo México would acquire 25% of Banamex at 0.85 times its accounting value, and the remaining 75% to 0.80 times its accounting value, he reported. This would represent a slightly higher value than offered by Pardo.
The actions of Grupo México fell more than 15% in the last minute operations in the morning.
Even before tensions with the government, conversations with Larrea had been repeatedly delayed, according to a person with knowledge of the previous conversations that asked not to be identified because they are private negotiations.
Citi seeks to obtain a higher IPO price than the valuation that established with Pardo, which is considered a floor for the price of the action, and the slightly higher price offered by Grupo México would not be a decisive factor, said the source.
Citi paid $ 12.5 billion for Banamex in 2001. The offer could trigger a war of offers, Bradesco analyst Rodolfo Ramos wrote in a report.
“The size of the Larrea portfolio reduces the probability that boy is forced to counterattack, perhaps together with other business groups, but the next step of Citi will probably define how we will proceed from now on,” Ramos wrote.
“The media perception of these two billionaires is clear; both have shunned scrutiny and public presence, but Larrea has never backed down in a good legal battle, and boy, apart from whom we follow the Mexican airport industry closely, he is a less known businessman.”
Grupo Mexico’s actions could become more volatile if Larrea decides to increase its offer, Ramos added.
With Reuters information.
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