Novo Banco's shareholders change bylaws for possible IPO, sources say

By Sergio Goncalves

LISBON (Reuters) -Shareholders of Portugal's Novo Banco on Wednesday approved key changes to its bylaws that would allow the lender to go ahead with a public listing, according to three sources with knowledge of the matter.

The statutory change approved at a general meeting of shareholders would only become effective if an initial public offering (IPO) goes ahead, one source said.

Two other sources confirmed the approval of the changes.

Novo Banco, which is Portugal's fourth-largest bank and is 75%-owned by U.S. private equity fund Lone Star, in February began preparations for an IPO, but a full sale has not been ruled out.

The first source said the so-called dual track process, in which sellers typically seek to build competitive tension between an IPO and a full sale to achieve the best price, remains on the table.

CEO Mark Bourke has long advocated for an IPO, which would keep the lender independent, and said a month ago that it was targeting either June or September, depending on the markets and the final go-ahead from shareholders.

Novo Banco was created in 2014 from the collapsed BES after a state bailout, with Lone Star buying its stake in 2017.

The resolution fund, which is financed by Portugal's banks, holds 13.54% and the Portuguese state holds the remaining 11.46%.

Novo Banco, Lone Star, the resolution fund and the finance ministry, which manages the state's stake, declined to comment.

Sources told Reuters in September that Novo Banco could be worth about 5 billion euros ($5.69 billion) after it completed a turnaround, which involved focusing solely on Portugal and becoming profitable.

($1 = 0.8787 euros)

(Reporting by Sergio Goncalves; editing by Charlie Devereux and Louise Heavens)