CRITERIA CAIXACORP, SA
Hecho Relevante #93879 - 27/05/2008 11:52
La Sociedad remite presentación sobre el principio de acuerdo para tomar una participación del 20 por ciento en GF Inbursa.
PDF Adjunto:
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Strategic alliance to develop retail banking in Mexico and build a platform for expansion
Investment in America, through a 20% stake acquisition in GFI :
case GFI will bring its franchise infrastructure and Mexican market knowledge to build a
banking products “cross-selling” strategy
Criteria will become the exclusive financial-industrial partner bringing its experience
and know-how to develop the retail banking business line
Mexican financial and insurance group with presence in corporate and retail banking, life/
non-life insurance, asset management and market brokerage
Inbursa Controlling shareholder: Slim family, 66%
Market cap: 6,400M
One of the most important financial group in Mexico: total assets 8,266 M; 6.7 million
clients and a net profit of 316M in 2007
91 branches/corporate offices, 226 sales force offices, 578 ATM, 3,000 service points and
16,000 agents
38.5 MXN per share ( 1,500 MM approx.)
Deal 20% stake: 10% primary shares + 10% secondary shares
Adjusted P/BV 07: 2.0x (Latam trades at 3.0x P/BV)
Involvement in the Corporate Governance bodies
Negotiation of final documentation (Shareholders Agreement)
Next steps Obtain the clearance from banking regulators (Spain & Mexico)
Subscription of new shares (capital increase) and launch the public bid (2H08) 2
One of the most solid economies :
Macro Linked to the USA (Nafta)
environment 12th in World (2nd in Latam) and member of the OECD
GDP growth: 3%
GDP: $ 900 bn approx.
GDP / capita has increased during recent years: +3.6% (07/06)
Stability:
Oil exporter
Inflation and interest rates in its lower levels
Foreign investments: 20% of the GDP
Inhabitants: 110 MM. Unemployment’07: 3.7%.
Low banking penetration
Banking
0.9 branches/10,000 inhabitants vs. 10 in Spain
System
Important growth potential:
Latam largest markets lowest rate in GDP% of credits, deposits and mortgages
Loans growth in 2007 (+31%)
Sound banking system and professionally managed
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Source: Economist Intelligence Unit
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Low
penetration
Source: EIU
Growth
prospective CAGR: 11%
Source: Banamex
e e e e e e 5
Low
$ %&
penetration
##
!"
'& % Source: Rims
Growth CAGR: 10%
prospective
Source: Rims
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! "
Telecomm. Financial Services
Market Cap. Telmex: 22.3 bn
Market Cap. America Móvil: 73 bn
Market Cap.: 4.3 bn
Services & Industry Other
Market Cap.: 7.3 bn Market Cap.: 2.5 bn
The Slim family owns an important conglomerate with an
aggregated marked capitalization of over 110 bn
The Slim family has a privileged network of contacts in Mexico and
all over the world
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# "
Business Lines Shareholder Base
Corporate
Banking
Retail
Investment banking
Free-float
banking
34%
Insurance Slim family
Asset
Management Pension
66%
Funds
Competitors (ranking by % of total assets; 2007) Market performance
7th
Source:CNBV 8
# "
Financial Rations Breakdown by business line (2007, US GAAP)
$ %& $ %'
( )
* + , -/ 0 2
&. 1( 34
% 4% 6
5
1 ./ /
-3 77 '
-'
$ ., 3
-% 7. 5
-,
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& .&
,
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9: .7
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% 3:
5
+* '/
9: , 9:
./
" # $ % %
& '
1<
8+ %=
9: ,5
9:
+ 3 9:
=& , 9:
=&
Income Statement Balance Sheet
( ' ( %% 1 1 1!
) ' 2 1 1 1!
( ! !
1 ! 1 '1
* + ,- '
3 4 1 1 1
./ 0 ' ' 0
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Source: GFI
# "
Infrastructure
!
'/ 57 =% =,
! ,%
/ &%
3 /7
= /5
'
* 3% '
-% .% 3
-& 7= .
-= /. 3
-.
7, /
-= &5 5
-3 , -.
.& 5 , -3
/5 /
% value market share by business line (2007) Banking Business – Assets (in ‘000 MXN)
CAGR: 22%
'5
'5
'
5 !
' 5
! 6 #
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Source: GFI
>
Based on fair current trading price supported by internal dividend discount
Adjustments model valuation
to P/BV Conservative approach to risk (Provisions policy)
Additional value creation sources (Unrealized capital gains)
2007 2008e
Not including any capital increase
Multiples P/BV PER P/BV PER
comparison
GFI 2.6 19.9 2.4 18.4
GFI adjusted 2.0 17.6 1.9 16.2
Peers 3.7 14.9 3.3 13.2
- MEXICO: Banorte, Compartamos
- BRAZIL: Itaú, Bradesco, Unibanco
Source: Analyst’s reports, Datastream, Bloomberg and Anual Reports
8% premium over price at May 23th (35.5 MXN / share)
Premium
over price Banking industry comparable transactions in Latam since 2002: 19% - 34%
Source: Bloomberg
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Criteria will participate in the governance and management bodies, also in the
Significant most important strategic decisions (Slim family will retain control and
management of the entity)
Influence
2 members of the BoD of GFI and 1 member in each BoD of the main
subsidiary companies
1 member of the Executive Committee (to be created) and participation in the
Credit and Audit Commissions
Develop and enhance business channels
Develop the
Complete the product portfolio (e.g. credit cards and mortgages)
retail banking
Cross-selling in the existing customer base
business
Broaden the customer base
Develop a multi-channel client approach
Maximise the potential of GFI franchise and the relationship with the Slim group
Strengthen accelerating the growth of the banking business both domestic and abroad
the Alliance Criteria will be the exclusive financial-industrial partner and will bring
experience, technology and know-how in retail banking
Growth and Target area: the Americas
expansion USA: ROFR. Criteria continues focused
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!
$% & ' (
* % 7 4 #
$3- # &
1 6 9( : #
!" ##
8 # 7 4 #
$+ / # &
') $ ) *+ ' ,$ ' -( $ '$%( ') $ ) *+ ' ,$ ' '(-( $ '$%(
Free-float
Free-float Assumption:
34% 20% Slim Slim family
does not sell
family any share
Slim family Criteria
20% 60%
66%
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IMPORTANT NOTE
The information contained in this presentation does not constitute an offer,
invitation or recommendation to engage in investment in the shares, or any other
financial instrument, of Criteria CaixaCorp, S.A. (hereinafter Criteria), especially in
the USA, the UK, Canada, Japan, Australia or any other country where the
purchase and sale of these shares is prohibited under applicable legislation.
This announcement may contain forward-looking information or statements
relating to forecasts and future projections for Criteria which are usually preceded
by the words: “expect”, “estimate”, “believe”, “anticipate” or similar. These
forward-looking statements are not a guarantee of future results and Criteria
recommends that no investment decision should be taken based on forward-
looking statements that speak exclusively as of the date on which they were made,
and particularly because projections reflect expectations and assumptions that
may be imprecise due to events or circumstances beyond the control of Criteria,
including: political factors, economic or regulatory issues in Spain or the EU,
interest rate fluctuations, exchange rate fluctuations or domestic and international
stock market movements, among others.
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Fuente: CNMV