Monday, March 20. 2006
Grupo Aval and Banco de Bogotá were slated as early favorites in the bidding due to their interest in Megabanco’s strong microcredit portfolio. Megabanco’s profits were up 148% over 2005. The bank’s total loan portfolio stood at 1.6 trillion pesos (~US$708,905,000) and assets measured 2.2 trillion pesos (~US$974,745,000) for the year. The bank’s debt was put up for auction by Colombian regulators due to liquidity problems with its parent company, Coopdesarrollo. The final sale price represented nearly a 500% premium on the book value of the bank’s debt, the most expensive sale of a Colombian bank in history.
Additional Resources
1) Business News Americas: “Analysts: Grupo Aval or Davivienda to win Megabanco Auction,” March 15, 2006.
2) Business News Americas: “Banco de Bogotá wins Megabanco Auction with US$358mn bid,” March 16, 2006.
3) Megabanco (In Spanish)
4) MicroCapital Blog: “Strong Microcredit Portfolio Makes Colombian Megabanco a Sought-After Acquisition Target,” March 16, 2006.
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