Qatari group teams up with Luxembourg to buy BIL for $950m under bailout plan
Qatar and Luxembourg are to buy bailed-out Dexia's private
banking arm for €730m ($950m), less than analysts had estimated, as the Franco-Belgian
group is broken up.
Qatar's al-Thani royal family will acquire 90 percent of
Banque Internationale Luxembourg (BIL) via their Precision Capital investment
group, Dexia said on Tuesday.
The deal follows Precision's agreement in October to buy the
private banking business of Dexia's Belgian rival KBC.
Morgan Stanley estimated the value of BIL at €1.0-1.7bn in
October, with reports at the time saying the overall price was likely to be
around 1 billion euros.
"It [the price] looks a bit low," KBC Securities
analyst Dirk Peeters said on Tuesday. "But everyone knows that Dexia have
to sell. They may have been willing to pay €800 to 900m, but thought they'd put
in a lower offer."
KBC has a 'reduce' rating on Dexia shares, with a €0.10 price
Dexia shares were down 3.9 percent at €0.32 at 1034 GMT,
underperforming a 1 percent rise in the Stoxx 600 banks index .
Dexia was bailed out by Belgium, France and Luxembourg in
October, with Belgium nationalising Dexia's Belgian banking business.
Luxembourg will buy the remaining 10 percent of BIL, Dexia
said on Tuesday.
Qatar has previously invested in European banks, among them
British lender Barclays in an emergency fund-raising three years ago.
Dexia BIL's stakes in Dexia Asset Management Luxembourg and
RBC Dexia Investor Services will be sold separately. Its portfolio of legacy
securities and stakes in Dexia LDG Banque and Parfipar will be transferred to
The BIL sale is a further step towards dismantling Dexia.
French state bank Caisse des Depots and La Banque Postale, France's post office
bank, are to take stakes in French financing arm, Dexia Municipal Finance.
Dexia also has to dispose of its 50 percent stake in a joint
venture with Royal Bank of Canada, RBC Dexia Investor Services, as well as
Dexia Asset Management and its fast-growing Turkish operation, DenizBank.
The group has secured temporary financing guarantees from
Belgium, France and Luxembourg of €45bn to cover its borrowings for six months,
but has still to secure such guarantees for the longer term.