Mexican investors eye Spain's Banco Popular

By Judy Macinnes

MADRID (Reuters) - A company representing Mexican investors said on Monday it was in advanced talks to acquire up to 20 percent in Spain's Banco Popular (POP.MC: Quote, Profile, Research), boosting the latter's share price by up to 9 percent.

A stake that size would cost 2.3 billion euros ($3.6 billion) at Popular's market capitalization of 11.4 billion euros, according to Reuters data. Popular is Spain's third largest bank behind Banco Santander (SAN.MC: Quote, Profile, Research) and BBVA (BBVA.MC: Quote, Profile, Research).

A statement to the Spanish stock exchange regulator on behalf of a company called Blueprime said it had already signed a deal with one Popular investor, represented by Spanish investor Trinitario Casanova, to acquire a 3.5 percent stake for 14.20 euros per share.

"No other agreements have yet been signed, although agreement is close to being finalized with a number of other shareholders with whom we are in advanced negotiations," the statement added.

Popular closed up 4.6 percent at 9.80 euros, easing from an earlier high of 10.24 as the market digested news that a bidder was prepared to pay a premium for a stake in the bank, which is seen as increasingly vulnerable to a takeover bid.

"The bank is without doubt in a vulnerable position at the moment as the economic slowdown takes its toll on lending volumes while also pushing up non-performing loan levels," a foreign asset manager said.

Popular shares have been volatile since Spanish press reports earlier this month said Mexican investors were interested in buying into the bank.

Mexican telecoms operator Axtel (AXTELCPO.MX: Quote, Profile, Research) denied reports that the company or its chief executive, Tomas Milmo, intended to make an offer for a stake in Popular.