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Liberbank shares surge on Abanca bid report

Shares of Liberbank SA rose 5.5% on May 28 following a report that rival Abanca Corporación Bancaria SA was close to making a bid for the bank.

Financial website Bolsamania reported that Abanca advisor Bank of America Merrill Lynch had "practically" completed securing financial for the deal, which will be made in cash for 100% of the bank. Bank of America Corp. currently holds 7.8% of Liberbank.

A holding company owned by Abanca owner Venezuelan billionaire Juan Carlos Escotet will take out the debt to finance the offer, and not Abanca, in order to protect the lender's capital ratios, the report said. The 87% he owns of Abanca will act as collateral, the report said.

Abanca had considered making a bid for the bank in February, but withdrew its interest shortly thereafter. At the time, Liberbank was in talks with Unicaja Banco SA, but those failed after the two could not agree on a share swap.

The Bolsamania report said Abanca was planning to hire PwC to conduct due diligence, and the auditor will have access to public information on Liberbank, but not confidential financial information.