ICBC to Take Stake in Standard Bank Argentina

Standard Bank is near to closing on the sale of a 25% stake in its Argentinean operations, according to a banker away from the deal. “It’s a nice size asset for pretty much anyone,” the New York-based banker says, adding that most of the major players in the region had taken a look at the asset prior to it entering one-on-one negotiations with China’s Industrial and Commercial Bank of China (ICBC). “It was a hot asset, frankly,” he says. Santander, Galicia, and Macro all have roughly equivalent market shares, and had considered acquiring Standard as a way to separate themselves from the pack. “It’s a strong franchise. Poorly managed, but a good franchise nevertheless,” the banker adds. ICBC has held a 20% stake in parent Standard Bank since 2008. The deal is expected to be valued at $700m-$800m, which would imply an enterprise valuation of around 16.8-19.2x 2010 earnings, broadly in-line with the 18x 2011 expected earnings Colombian conglomerate GrupoSura paid last week for ING’s LatAm insurance assets. The banker describes the value as “realistic” after several players had already made offers that did not overvalue the assets. Standard is not using an advisor on the deal.