Portugal: Bigger should be even better
In the wrangling that is likely to have gone on between Banco Santander Central Hispano (BSCH) and Banco Comercial Português (BCP), one option the Spanish bank is unlikely to have spent long considering is a hostile takeover. It may have had a 14% stake in BCP, but its shares could account for only 10% of shareholders' votes in any ballot. Even if BSCH had tried to build up its equity holding, it would have still been worth only 10% of shareholders' votes.
The explanation is a company by-law known as blindagem, literally armour plate. It gives the bank's management an extra layer of protection, and makes unsolicited takeovers very unlikely in the top tier of Portuguese banking.
At its most recent shareholders' meeting BCP made its blindagem by-laws more restrictive. Voting rights are now limited to 10% of the votes present at the shareholder meeting, making any move against the management of the bank even more difficult.
Banco Português de Investimento has also caught onto the idea, passing a blindagem rule at its last shareholders meeting that limited voting rights to 12.5%.