Portuguese bank shares spike in wake of Dos Santos’s proposed merger

Share prices of two of Portugal’s largest institutions exceeded recent highs in early March, and all it took was a letter from one of the bank’s minority shareholders.

However, the minority shareholder in question is not your average individual or institutional investor. Isabel dos Santos, the daughter of Angolan president Jose Eduardo dos Santos and a woman Forbes named Africa’s first female billionaire back in 2013.

It was she who wrote the letter, to Spain’s Caixabank, one of the Iberian peninsula’s largest. Caixabank owns nearly half the shares at Banco BPI, the same bank of which dos Santos owns about a fifth. Dos Santos argued that Caixabank’s proposed takeover undervalued Banco BPI, and that not only should they avoid the acquisition, but they should merge with fellow Portuguese bank Millennium BCP instead.

Talk of a merger caused the shares of each bank to skyrocket, both to highs not seen since late 2014. This is typical of talk of an ownership shake-up, when share prices have to go up in order to convince shareholders to sell their shares before a takeover or merger can go through. Of course, the spike also helped dos Santos’s 20 percent stake increase in value as well, revealing her personal motive behind sending the letter.

However a closer investigation shows that dos Santos might have long-term plans in mind, should a merger be proposed and successfully passed. The other bank, Millennium BCP, is Portugal’s largest private bank, but its largest shareholder is the Angolan state-run oil company Sonangol, which owns nearly 20 percent of shares. While dos Santos is not involved directly with Sonangol, she is heavily involved in a number of other ventures in her sub-Saharan homeland.

The merger faces a number of regulatory hurdles, and if the bank’s failed attempt to merge in 2007 is any indication, there is a long road ahead. Both of the banks were cut into the recent government bailouts, and Banco BPI is already a leading candidate to absorb Novo Banco, a new, conservative-minded institution established after the financial crisis. But dos Santos was adamant in her letter — copies of which were also sent to the boards of BPI and Millennium BCP — that a combined institution would be both a leader in Portugal while also expanding the bank’s footprint in Angola and Mozambique, where both banks already have operations.

Perhaps dos Santos’s only goal in sending the letter was to ruffle some feathers, make Caixabank think twice before making a final bid for complete control of Banco BPI. Even if that was her only goal — and considering her savvy dealings in the past and her number of sound investments, it’s not likely she had only one thought in mind — she accomplished it with flying colors. Hundreds of media sources around the globe reported on the share price spike, and Caixabank now has no choice but to take notice.

What, did you expect anything less from Africa’s first female billionaire? More than just "the daughter" of a president, Isabel dos Santos reveals herself as a talented businesswoman, and a role-model for fellow African women.