HSBC share price: Bradesco to bid for UK bank’s Brazilian unit

Banco Bradesco SA, Brazil’s second-largest private-sector bank is said to be close to making a formal bid for HSBC Holding Plc’s (LON:HSBA) Brazilian unit. Agência Estado, the newswire service of O Estado de S. Paulo newspaper, yesterday said that Bradesco would make a binding offer to acquire HSBC Bank Brasil Banco Múltiplo next month, attributing the information to Bradesco chief executive officer Luiz Carlos Trabuco.

The newswire said that Trabuco told it at an event hosted by banking group Febraban that the bid would be announcedin tandem with a timetable for the sale process proposed by the British banking giant. The content of Trabuco’s remarks has later been confirmed by a spokesman at Febraban.
Estado said that Bradesco’s boss had declined to reveal more details on the bid for HSBC Brasil, although he noted that “since we are in the second phase of process, the appetite, the size of the check, will be practically decided at the very last minute”.
The news seems to be in line with previous reports regarding the sale of HSBC’s Brazilian unit. The British bank has announced its intention to sell the operation as part of its drive to simplify its structure. Citing an unnamed source with direct knowledge of the matter, Reuters last week reported that the process of disposing of the unit was in advanced stage and that Brazil’s top three private-sector banks had made informal bid. According to the source, the sales could be worth between $3 billion and $4 billion. Also last week, Bloomberg News reported that Bradesco had made the highest bid for HSBC Brasil of 14-billion reais ($4.5 billion).
In today’s trading, HSBC shares were down 1.1 percent 584.50p as of 12:15 BST. The stock has fallen nearly four percent since the start of the year and the company’s market capitalisation currently stands at £112.7 billion.
As of June 16, 2015, the consensus forecast amongst 30 polled investment analysts covering HSBC Holdings plc had it investors should hold their position in the company. The same consensus estimate has been maintained since November 26, 2014, when the sentiment of investment analysts deteriorated from “outperform”.
As of 13:57 BST, Thursday, 18 June, HSBC Holdings plc share price is 584.50p.