(December 18 – 17:30 ET) – Bank of Montreal has entered into agreements with Banco Bilbao Vizcaya Argentaria (BBVA) and Grupo Financiero BBVA Bancomer (GFBB) relating to BMO’s holdings of GFBB securities. The agreements are subject to regulatory approval.

The holdings include approximately 1 billion voting shares of GFBB and approximately US$99 million of subordinated debentures issued by Bancomer, GFBB’s banking subsidiary.

BBVA has agreed to acquire 200 million GFBB voting shares, representing approximately 20% of the Bank of Montreal’s holdings, at a price of 5.935 Mexican Pesos per share in January 2001. This transaction would result in a pre-tax gain to Bank of Montreal of approximately $30 million.

BMO will retain approximately 67 million shares of GFBB in its investment portfolio. The bank is committed to this holding until April 2002.

GFBB has agreed to undertake and facilitate market transactions, at BMO’s direction, for the sale of 745 million shares, at market prices, over the period from January 2001 to October 2002. This will permit an orderly absorption of Bank of Montreal’s shareholdings into the market.

BMO says options to purchase approximately 10 million BMO common shares granted to GFBB in 1996 have been terminated.

Bancomer has agreed to redeem the US$99 million subordinated debentures by April 2002.

BMO acquired a 20% voting interest in GFBB in March 1996. GFBB subsequently signed a merger agreement with BBVA.
-IE Staff