Espirito Santo Financial Group (ESFG) and Banco Espirito Santo Group, (BES Group) Portugal's 3rd biggest financial group, have announced a strategic investment in Saxo Bank by taking a five percent ownership of the Danish Bank's equity.
In a deal that gives the Portuguese group the option to expand its share to ten percent within five months, it could become the third biggest shareholder of the privately-held Saxo Bank along with the two founders and joint CEOs, Kim Fournais and Lars Seier Christensen, and General Atlantic, the American private equity fund. Following the completion of the transaction, Saxo Bank will be ranked as the fourth largest Danish bank by market cap.
Valuing Saxo Bank's market valuation at Euros 1,26 billion, the transaction is being welcomed by both banks as a strategic move that will not only strengthen their well established partnership, but will create new opportunities for growth and expansion. With a ten percent ownership held by both entities, BES Group and ESFG will be jointly entitled to designate a member of Saxo Bank's Board of Directors.
BES Group is the majority shareholder of Banco Best, a white label partner of Saxo Bank since 2006. Last year, Banco Best was ranked as the best consumer Internet Bank in Portugal. "With Saxo Bank's well established record as a leading and innovative player in the global online investment industry, we see huge potential in the international market place by combining our forces through this investment," says Ricardo Salgado, the president of BES Group.
According to Ricardo Salgado, expanding the already well established partnership between BES Group, through Banco Best, and Saxo Bank into a broader, more expansive cooperation across products and markets will open a string of mutually profitable opportunities for both businesses at home and overseas. "Our equity investment in Saxo Bank is an endorsement of the value and intrinsic strength of our partnership. Having worked so closely with Saxo Bank as we have, we could not have wished for a better partner or a more promising investment in this area," says Ricardo Salgado.
In a joint statement, Kim Fournais and Lars Seier Christensen pointed out the strategic nature and significance of the investment. "We are very pleased to welcome BES Group and ESFG as major shareholders that will help up with strengthening and expanding of our core business. We know the bank's management and personnel very well and have learned to appreciate them as highly professional and knowledgeable operators both in the domestic and international market places. We firmly believe that the experience and acumen they bring to the table will help us to consolidate and expand our global operation and bring our products and services to new markets."
Together, BES Group and Saxo Bank will explore their strategic opportunities for closer cooperation in overseas markets like Brazil, Africa and Macao.
In the all-cash transaction all existing shareholders will be offered to participate proportionally in the sale of the initial five percent to BES Group and ESFG and a further five percent if these entities subsequently exercise their option within the following 5 months.