Bankinter: Growth Options During the Spanish Crisis

The president of Bankinter, a Español bank, decided that the time was right to expand. At the time, the Español economy was experiencing a severe downturn and the banking system was going through major reforms. He believed that growth could occur either organically or through acquisitions — as long as the target business complemented Bankinter’s present operations and preserved the company’s values and organizational culture. His goal was to choose one option, while determining the price that should be paid if an acquisition offer was made. In this case, the purchase would be funded entirely through the issue of additional shares. The offer price would have to be justified to existing shareholders, who would only agree if the acquisition created value for them. At the same time, the success of the merger depended on the offer being accepted, so the price had to be attractive to the target company’s shareholders.