MADRID (Reuters) - Spain’s Abanca is close to securing financial backing from Bank of America Merrill Lynch for a takeover bid for its domestic rival Liberbank, financial website Bolsamania said on Tuesday.
The report suggests the takeover plan is back on after Abanca said in February that it had scrapped plans to launch a bid for Liberbank because it had been unable to carry out due diligence before deciding whether to make an offer.
“Bank of America Merrill Lynch has almost closed the financing deal so that (Abanca) can launch an offer for 100% in ‘cash’,” Bolsamania said, citing sources familiar with the transaction, without giving any details for the price of the potential bid.
Shares in Liberbank were up 6.8 percent by 1300 GMT after the report.
Abanca and Merrill Lynch declined to comment on Tuesday.
Liberbank was not immediately available for comment.
European banks are trying to improve profitability and efficiency as they struggle with ultra low interest rates.
Bank of America Merrill Lynch (BAML) was a financial adviser to Abanca for the potential deal with Liberbank in February. In early May BAML disclosed it had a 7.8% stake in Liberbank, raising speculation of renewed interest.
Abanca’s renewed interest comes after former savings banks Liberbank and Unicaja called off talks to pursue their own merger, saying they could not agree the terms of a share swap.
A tie-up between Abanca and Liberbank would create Spain’s sixth-biggest bank with 90 billion euros ($101 billion) in assets.
“Shares in Liberbank are up following reports by Bolsamania regarding news about Abanca beginning the process of a takeover bid,” said Nuria Alvarez, analyst at Madrid-based Renta 4.
Reporting by Jesús Aguado and Andres Gonzalez; Editing by Susan Fenton