Isabel dos Santos proposes Millennium, BPI merger

By Sergio Goncalves LISBON (Reuters) - Angolan investor Isabel dos Santos has proposed a merger between Portugal's largest listed banks Millennium bcp and Banco BPI, a source with knowledge of the proposal said on Tuesday. Dos Santos, Africa's richest woman and the daughter of Angola's president, has sent a letter to the chief executives of Spain's Caixabank, Millennium and BPI detailing her proposal, the source said. The proposal was made after Caixabank, BPI's largest shareholder with a 44 percent stake, launched a takeover bid for BPI last month. Dos Santos is BPI's second largest shareholder with a 18.6 percent stake. The source said dos Santos' stake in BPI is not merely a financial holding but a strategic one, without elaborating. Shares in Millennium were 5.8 percent higher at 0.088 euros a share on the news, while BPI shares jumped 8.09 percent to 1.470 euros a share. Neither BPI nor Millennium would comment. The proposal marks the second time in just a few months that dos Santos, already a big investor in Portugal, wades into the country's corporate arena. Late last year, dos Santos launched a takeover bid for Portugal Telecom SGPS, a Lisbon-listed holding company that holds a stake in Brazil's Oi, in an attempt to prevent Oi from selling Portugal Telecom's operations in Portugal to Altice. Luis Goncalves, a trader at GoBulling brokerage, said: "The initiative could force Caixabank to raise its bid and adds a speculative angle to BCP, it shows that the sector is atractive." Albino Oliveira, an analyst at brokerage Fincor, said Caixabank needed to win over two thirds of shareholders to succeed with its bid for BPI, which would be difficult to do without the support of dos Santos. "The point is that Isabel dos Santos is not willing to agree to Caixabank's bid in its current conditions," Oliveira said. BPI is currently trading above Caixabank's bid price of 1.329 euros a share. Caixabank declined to comment. On Monday, its chairman Isidro Faine was asked if he was concerned by bids by competitors. "I don't believe it means anything. We've just started the game and within this game there'll be moments when things seem one way and moments when they seem the opposite," he said. Angolan state oil company Sonangol is Millennium's single, largest shareholder with a 19.44 percent stake. Millennium and BPI have discussed a possible merger at least two times in the past but each attempt failed. Dos Santos is also a major shareholder in Portugal's second largest telecoms company NOS. Both BPI and Millennium have banking operations in Angola.