The Belgian government sells part of BNP Paribas

The sale started on Tuesday. The intention is to sell a portion of the shares through an accelerated procedure without disrupting the market.

In practice, this is done through investment bankers who buy shares at a certain price with the aim of selling them at a higher price. The consortium that puts the shares on the market, according to our information, consists of Bank of America, Goldman Sachs and BNP Paribas Fortis, the Belgian subsidiary of BNP Paribas.

Symbolic price

The Belgian state has previously sold shares in BNP Paribas. In May 2017, that interest was reduced from 10.3% to 7.7%. In 2018, the Belgian government once again tried to sell the shares. The intention was then to raise 2.7 billion by selling the shares at 68 euros each. This is the price that the Belgian government agreed with the French bank in 2008 for the former Fortis bank.

The €68 people wanted in 2018 was higher than the 2017 sales price. That turned out to be very ambitious. The price just missed the intended €68, and then Finance Minister Johan van Overtveldt (N-VA) didn’t get the go-ahead to cut the price even slightly. BNP Paribas closed Tuesday at 66.15 euros, which means that it is selling this time for less than the symbolic 68 euros.

“a good family man”

“I have been expecting a new sale of BNP Paribas shares for several weeks. The market is favorable, and the bank’s share price has recovered significantly. It is in line with the policy of a good family man,” says a financial expert.

In the government environment, it is heard that phasing out goes well with good governance and minimizing interests in the financial sector. An important part of the government’s interests consists of financial stocks. The government owns Belfius Bank, the major shareholder of Dexia, the Ethias syndicated insurance company and helps stabilize the Ageas insurance company.

Rising interest rates make financial stocks more valuable, so the government is balancing its portfolio a little more by selling about a third of its shares in BNP Paribas – more precisely, 2.7% of all shares.

By not selling too much at one time, the government can limit the discount it must give investors on such a package. The discount came according to the website from the time by 1.8 per cent, which means that sales were just under 65 euros. This includes the profits that the government will still collect. This dividend, 3.9 euros per share, must therefore be subtracted from the purchase price.

The proceeds from the sale, in the amount of about two billion euros, will reduce the national debt by less than 1 percent.

Prior to this sale, the Belgian government owned 96 million shares of BNP Paribas. She now has about 63 million of that remaining.

For the government, Belfius is the largest financial interest until further notice. Bellevues is now worth at least $10 billion. In 2018, the government actually tried to move Belvius to the stock exchange. No plans for that today. Market parties are watching with interest whether the state insurance company Ethias will marry Belvius sooner or later.