MetLife is offering to buy all shares, BBVA has agreed to sell the 64% of PVD they own for aprox US$92 per share
Met Life is offering to buy 100% of the outstanding shares, the 64% of outstanding shares refers deal with BBVA to buy all of their shares, thereby guarantying the takeover.
The drop is because MetLife is paying US$ 1,302million for these BBVA shares which sets the market cap for all outstanding shares at about US$2,025million. This results in aprox. US$92 per share.
Met Life will also pay in addition any dividends owing and some undisclosed additional payments that in the text below may bring BBVA's payment to US$ 1,521million and the market cap to US$ 2,365million or US$ 107 per share.
Clearly the ambiguity and confusion has led the market to react the way it has.
Following is the BBVA's release which to me is the most concise.
Banco Bilbao Vizcaya Argentaria, S.A.(BBVA), in compliance with the Securities Market legislation, hereby communicates the following:
BBVA has reached today an agreement (the "Agreement") with MetLife, Inc., for the sale of the 64.3% share capital that BBVA holds in the Chilean pension fund manager Administradora de Fondos de Pensiones Provida S.A. ("AFP Provida" or the "Company").
Pursuant to the terms of the Agreement and subject to the satisfaction of
the conditions set forth therein:
· MetLife, Inc. has agreed to cause one or more of its wholly-owned affiliates to commence, both in the Republic of Chile and in the United States of America, a tender offer in cash (the "Tender
Offer") for 100% of the issued and outstanding shares of AFP Provida;
· BBVA has agreed to transfer the entirety of its 64.3% interest in AFP Provida to such affiliates of MetLife, Inc. either (i) directly through the Tender Offer, or (ii) partially directly through the
Tender Offer and partially indirectly through the sale to MetLife, Inc. of a newly incorporated BBVA affiliate in Chile. In this case, BBVA shall be paid the same price that it would be paid by the
transfer of the shares of AFP Provida through the Tender Offer.
BBVA estimates that the total cash amount that the shareholders of the Company could be paid upon completion of this Agreement, taking into account the purchase price and the dividends that could be distributed, could amount to US$ 2,365 million (CLP 1,114,625 million for information
purposes), of which US$ 1,521 million would correspond to the BBVA's 64.3% interest in the Company.
It is anticipated that the closing of the transaction will take place in the second half of 2013 and that the BBVA's capital gain net of taxes arising from the transaction will amount to approximately € 500 million.
The total amount in cash that the shareholders of the Company could be paid, referred to above (US$ 2,365 million), breaks down as follows:
· The price agreed for a 100% interest in the Company, US$ 2 billion, plus a fixed amount for each day having elapsed between the date of the most recent Company month-end balance sheet
available prior to the commencement of the Tender Offer and the date of publication of the Tender Offer's results (as determined pursuant to the Agreement). BBVA estimates that this positive
adjustment may amount to approximately US$ 25 million. Taking into account such estimated adjustment, BBVA estimates that the total purchase price for a 100% interest in the Company would be US$ 2,025 million (CLP 954,383 million for information purposes). The purchase price corresponding to the 64.3% stake of AFP Provida directly and indirectly-held by BBVA would in such scenario amount to US$ 1,302 million.
· In addition to the purchase price, the Agreement permits AFP Provida, subject to the prior approval of the Company's governing bodies, to make the following dividends prior to the
commencement of the Tender Offer:
(i) an annual dividend in respect of 2012 financial year profits;
(ii) a dividend of cash generated from the January 9, 2013 sale of AFP Provida's former approximately 7.5% indirectly-held equity interest in Administradora de Fondos para el Retiro Bancomer, S.A. de C.V. (Mexico);
(iii) a dividend of cash generated from the expected sale of AFP Provida's approximately 15.87% indirectly-held equity interest in Administradora de Fondos de Pensiones Horizonte S.A. (Perú);
(iv) a dividend of certain excess cash amounts of the Company as calculated pursuant to the Agreement.
BBVA estimates that the sum of the aforementioned dividends, if made, could amount to approximately US$ 340 million.
The commencement of the Tender Offer and the subsequent closing of the transaction are subject, among other conditions, to receipt of regulatory approvals both in Chile and Ecuador.