Investment bank Credit Suisse reckons mining tycoon Germain Laria will pay an “expensive” valuation of $7.1 billion for 80 percent of Banmex if the transaction is confirmed.
In a report, they also pointed out that beyond financing large projects, there is no clear synergy with Larrea’s main business, Grupo México, a company mainly dedicated to mining and transportation and which uses banking infrastructure for this. Can do.
In fact, Credit Suisse indicated that the country’s second-richest man’s offer for the sale of Citi in October 2022, along with consumer portfolio and infrastructure, is a billion dollars more than the bank brand’s offer. (Banamex).
“Credit Suisse’s view is that the valuation was expensive both on an intrinsic and relative level, particularly given that there is no apparent synergy between Grupo México and Citi’s businesses beyond a large financing project using Structure Bank, ” They said.
He clarified that the acquisition price implies a P/TBV multiple of 2.2x, which is a 22 per cent premium to the expected fair multiple of 1.8x and also to its listed peers as it stands at 1.8x for Banorte and 1.3x for above Inbursa.
Similarly, Credit Suisse recognized that Larrea’s lack of experience in the banking industry could also lend a degree of uncertainty to the story of a successful recovery in Banamex and reversal of market share losses, despite the fact that the businessman had been in office for nine years. Was the director of the company for. Financial conglomerates in Mexico.
President Andrés Manuel López Obrador assured this Tuesday that his government had no problem with businessmen German Laria and Grupo Mexico buying Banamex from Citigroup.
“We have information that negotiations are going very well and that one of the potential buyers is Grupo México and we have conveyed to the directors and managers of Citibanamex that there is no disagreement on the part of the government (…) No on our part There is no problem in carrying out this operation”, the President said at his morning conference.
Citibanamex is currently the fourth largest bank in the country. According to data from the National Banking and Securities Commission (CNBV), bank assets totaled 1.4 trillion pesos in the first quarter of the year, representing more than 10 percent of the financial system; However, in the past year the bank has reduced its participation and dropped a step, moving to fourth place among the most important institutions in the system.