Flowers cools on Spain bank deal amid crisis

LONDON, Dec 6 (BestGrowthStock) – J.C. Flowers has cooled its
interest in investing in a Spanish caja until Spain has restored
faith in its finances, the head of the U.S. private equity firm
said on Monday.

If Flowers backs away from Banca Civica it would be a blow
to the troubled savings banks, or cajas, as Spain is attempting
to accelerate the consolidation of the industry, who are seen as
needing capital after a severe recession.

J.C. Flowers is led by Christopher Flowers, who told the
Financial Times that any investor would have to be “pretty
brave” to move into Spain or Ireland at present. A spokesman for
the private equity firm confirmed his comments.

Flowers in July pledged to buy 450 million euros ($603.9
million) in convertible bonds in Banca Civica, when the caja
failed a stress test and was told to raise capital.
[ID:nLDE66M221]

The deal was non-binding. “That has never been superseded by
a formal agreement. Consequently we have not made any investment
in Spain and are not committed to do so,” Flowers told the
newspaper.

The paper said he stressed he was unlikely to buy a bank in
any country facing concerns about its sovereign credit risk, but
an investment in Civica would make sense when it completes
merger discussions with CajaSol, another caja.

Shares in Spanish banks fell on Monday, with the major
players Santander (SAN.MC: ) and BBVA (BBVA.MC: ) both off around
2.5 percent. Smaller banks including Banco Popular (POP.MC: ) and
Banesto (BTO.MC: ) were also marked lower.

Flowers is also casting an eye on Ireland, people familiar
with the matter have told Reuters. [ID:nLDE6AO187]

That could include an investment in Bank of Ireland (BKIR.I: )
or Allied Irish Banks (ALBK.I: ), who both need fresh capital, or
asset portfolios, if the government limits the downside risk.
($1=.7452 Euro)
(Reporting by Steve Slater; Editing by Hans Peters)

Flowers cools on Spain bank deal amid crisis