LISBON, Jan 31 (Reuters) - The U.S. private equity firm Lone Star has informed the Portuguese government that it intends to sell a 25-30% stake in Novo Banco through an initial public offering (IPO), rather than pursuing a full sale, said Finance Minister Joaquim Miranda Sarmento on Friday.
In September, three sources familiar with the matter revealed to Reuters that Lone Star, the majority owner with a 75% stake in Novo Banco, was contemplating both a complete sale and the option of an IPO. The sources estimated Novo Banco's value at around 5 billion euros ($5.2 billion).
Established in 2014 from the Portuguese government's rescue of the failed Banco Espirito Santo, Novo Banco stands as Portugal's fourth-largest bank.
Lone Star acquired its share in 2017, with Portugal's resolution fund and the state holding the remaining stake.
Miranda Sarmento stated that Novo Banco and Lone Star had expressed their intention to pursue an IPO of approximately 25% to 30% of the bank's capital.
He also clarified, The government has not been informed of any plans by Lone Star to divest its entire 75% stake in the bank.
Novo Banco declined to provide comments, while a request for comment has been sent to Lone Star.
Though the five leading Portuguese banks currently control over 80% of the nation's banking assets, analysts suggest potential for further consolidation to boost competitiveness.
However, the believes that the bank would fare better operating independently.
In June, CEO Paulo Macedo of state-owned Caixa Geral de Depositos (CGD) mentioned that the largest Portuguese bank was exploring "all possibilities" to acquire another bank to maintain its market supremacy against the backdrop of expanding foreign banks, particularly those from Spain, the neighboring country.
Miranda Sarmento told reporters, If CGD decides to assess the market conditions and foreseeable developments, the government will base its decisions on this appraisal, but we will not meddle in CGD's management.
The other significant banks in Portugal include Millennium bcp, Santander Portugal - a subsidiary of the Spanish banking group Santander, and BPI, owned by Spain's CaixaBank.
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