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Caixabank mulls premium valuing Bankia at around 4 bln euros, source says

MADRID, Sept 14 (Reuters) - Spain’s Caixabank is considering paying a premium of between 15% and slightly more than 20% over the average share price of Bankia in the last three months, valuing the state-owned lender at up to around 4 billion euros ($4.75 billion), a source with direct knowledge of merger talks said on Monday.

The source and another source with knowledge of the ongoing talks said that the terms of the merger deal between the banks, aimed at creating Spain’s biggest domestic bank by assets, could be announced as soon as this week but were still not closed.

Bankia, Caixabank and the Economy Ministry declined to comment. The state holds a 61.8% stake in Bankia.

Taking into the above mentioned premium, this would be equivalent to a share price in Bankia of between 1.21 euros and 1.28 euros per share if the high range of the premium was set at 22% and the closing date for the average was September 3.

This would value Bankia at a price of between 3.7 billion euros to 3.9 billion euros. While being at a premium over the past three months, this would be below the current market price of 4.2 billion euros.

Since news of the merger first emerged, shares in Bankia have risen around 33% while Caixabank has gained 11%, giving both a combined market capitalisation of 16.2 billion euros. ($1 = 0.8424 euros) (Reporting by Jesus Aguado Editing by Ingrid Melander)