The Spanish Experience: Argentaria Privatisation

Abstract

This case describes the privatisation of Argentaria, one of Spain’s largest banking groups. In order to analyse the true scope of the operation and the events leading up to it, we will begin by describing the Spanish banking system, adaptation of the public bank to EC directives and conclude by analysing Argentaria’s initial share prices and comparing them with the average PER for other bank shares. The high discount rates offered by Argentaria at the outset can be at least partly explained by the IPO (Initial Public Offering), although there are certain other economic and political factors which, as will be seen later on in this paper, might provide some clues to the differences between Argentaria share performance and that of other bank shares.