In what is the toughest battle yet for a Romanian public company - the privatisation of Banca Comerciala Romana (BCR), which is being fought over by 11 of the largest banks and financial institutions of the world - the Texas Pacific Group consortium and a venture capital division of Citigroup have announced an aggressive strategy based on price and size and the fact that they will attract other US interest to Romania.
The European banks, on the other hand, are looking to Romania''s economic integration into the European Community.
In their first statement to the Romanian market, the representatives of Texas Pacific Group, a strong US investment fund that is well known on Wall Street despite otherwise keeping a relatively low profile, have announced that the first thing they will do if they win the tender for the bank is to bring foreign managers on board.
"We will complement BCR''s management with the best bankers the world has to offer at the moment," TPC principal Mathias Calice told Ziarul Financiar. So far only Deutsche Bank has made any statements (one week ago) about what it plans to do with BCR. The German bank said they would rely on the local management and that price was not the essential factor in the decision to sell BCR, but the development prospects the buyer would provide.
The institutions that submitted letters of intent for BCR are: Fortis (Belgium), Banco Comercial Portugues (Portugal), the National Bank of Greece, Intesa Bank (Italy), Deutsche Bank (Germany), Erste Bank AG (Austria), Dexia (Benelux), KBC (Belgium), BNP Paribas (France), ABN Amro (Netherlands) and Texas Pacific Group with Citigroup Venture Capital International. Mathias Calice chose not to reveal how much the American consortium was willing to pay for BCR for "competitive reasons", however he said Citi and TPG made as much money in 2004 "as all the other competitors put together".
On the other hand, the European banks are proving to be strong competitors. Their interest in BCR is based on the fact that it is the last large bank in the region that has not yet been privatised, making it one of the last opportunities to enter South East Europe.
When contacted by Ziarul Financiar yesterday, representatives of ABN Amro and Erste Bank, who are regarded as surprise contenders in the race, explained their decision to participate in the privatisation.
"This is a logical step for ABN Amro considering it has been on the Romanian market for 10 years and has pretty solid footing for a foreign bank, a position it could further consolidate. We must add, however, that we are still in an exploring stage: we will conduct the due diligence and, depending on the results, we will decide whether or not to make a firm bid," Carolien Pors, ABN Amro''s spokesperson in Amsterdam, told Ziarul Financiar.
Erste Bank, which previously announced an interest in CEC, is also contemplating BCR.
"By sending a letter of intent Erste Bank wants to show that it is assessing all the opportunities of entering the Romanian market. As no decision has yet been reached in the CEC privatisation, BCR, despite being a commercial bank with the largest share of the retail market in Romania, provides Erste Bank with an alternative way of entering the market with a significant market share. BCR thus affords one of the major financial institutions in the CEE region the chance to offer its products and services on the Romanian market and use its expertise in turning state-owned institutions into modern, client-oriented banks," explained Michael Mauritz, a spokesman for Erste Bank.
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