WOOD Flash - Garanti: BBVA voluntary offer
This morning (15 November), BBVA announced that it intends to make a voluntary tender offer to buy the remaining 50.1% of Garanti from the market for TRY 12.2/share. The offer price implies a 15% premium to the previous close of TRY 10.6/share (12 November). BBVA expects to finalise the tender offer in 1Q22E. We calculate that BBVA’s tender offer values the bank at 4.3x P/E and 0.7x P/TBV for 2021E, on our estimates, vs. 3.7x P/E and 0.6x P/TBV as of Friday’s close.This is a positive corporate action, in our view: the depressed valuations are starting to compel dedicated controlling shareholders to act. On the other hand, we believe that the average institutional investor holding Garanti at 3.7x P/E on Friday was probably betting on a more significant rerating and medium-term macro normalisation. In our view, the bigger rerating still relies largely on top-down factors. We rate Garanti a BUY with a TRY 11.9/share PT. The stock trades at 3.7x P/E and 0.6x P/TBV for 2021E on our estimates.
Turkiye Garanti Bankasi is a private banking group based in Turkey. Co. operates as an integrated financial services group in every segment of the sector including corporate, commercial, SME, payment systems, retail, private and investment banking together with subsidiaries in pension and life insurance, leasing, factoring, brokerage, and asset management. Co. provides a range of financial services to 13 million customers through a distribution network of 994 domestic branches; 6 foreign branches in Cyprus, Luxembourg and Malta; 3 international representative offices in London, Dusseldorf and Shanghai with more than 4,152 ATMs, a Call Center and internet.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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