Mexico City — A primary share offering by Banamex on Mexico’s Stock Exchange is unlikely, and even if the bank were to announce it, Mexico does not have the conditions to receive the new issuer, according to analysts consulted by Bloomberg Línea.
Amín Vera, Investment director at Invala Family Office, says that this is not the best time for the bank to attempt such a move.
Citibanamex CEO Manuel Romo told the media on December 5 that the buyer of Banamex, which Citi put up for sale at the beginning of this year, or an alternative to the sale, would be announced in the first quarter of 2023 .
“The bank continues with options on the table until a decision is made. That is why the announcement we will make in the first quarter of 2023 is important,″ Romo said.
One of those sale alternatives would be a primary share offering on the Mexican stock exchange.
Contacted about a possible IPO, the directors of the two stock exchanges in Mexico have said they do not have information they can share regarding such a move, but did highlight the interest there would be in an IPO, given the drought of new listings in more than five years.
“All the information has been handled very cautiously, as is natural,” said the CEO of the Bolsa Insitucional de Valores, María Ariza, at a press conference.
“We have heard that there could be a crossover in the markets. This would be important news for the market,” Ariza said
For his part, Mexican Stock Exchange CEO Jose-Oriol Bosch said that he has no information regarding a possible IPO.
“If at any given time they think the stock market is a good option for me to be able to participate in the sale, we will be very pleased, and we will do our best possible job,” he said.
However, according to Carlos Gonzalez, director of economic, financial and exchange analysis at Monex, conducting a primary share offering is not viable.
“If it were to be done in Mexico, I see it as more complicated,” he told Bloomberg Línea. “The first thing they would have to do is to list the operation in Mexico, which implies a higher administrative cost, to then take out the public Oofering of the Mexico division.”
The Monex strategist said the most natural thing to do would be to split the Mexico part in the US, and carry out the public offering there, although he added that he saw that as less probable.
Vera mentioned that the Mexican market has very little participation and liquidity., and “this is reflected in the fact that the shares either never move - as in the case of BBVA - or they are returned to the parent company, as happened with Santander de México.
There are financial issuers in the country that do demonstrate liquidity and even belong to the Prices and Quotations Index (IPC), such as Grupo Financiero Banorte (GFNORTEO), Banco Regional (RA), Grupo Financiero Inbursa (GFINBURO) and Banco del Bajío (BBAJIOO).
Speculation regarding Banamex’s future owner
Analysts are also deep in discussion regarding the possible new owner of Banamex’s consumer segment.
The most mentioned names are Germán Larrea, owner of Grupo México; and Daniel Becker, a leader of Mexico’s banking association and president of Grupo Financiero Mifel, but other national and international investors are not being ruled out, according to Manuel Romo.
Vera said a possible IPO would depend on who the buyer is. “If it is Grupo Mexico, the big question is whether it would be done directly by the group, or through some external mechanism”.
If a process is carried out in the capital markets, they would place a part of the shares in circulation, but maintaining shareholder control, “as with Grupo México Transportes”, he added.
If Banamex were to be bought by Mifel, the placement would make more sense to the strategist, since the banks does not have enough cash to earn by its own means.
“That’s why they are looking for financing with foreign funds, and with a ‘quick’ IPO they could prepay a good part of the capital they raise. But we don’t think they will win,” said Vera.
For his part, González believes that “the most likely outcome is that Germán Larrea will take it”.