Bloomberg News

MEXICO CITY - Grupo Financiero Bancomer SA, Mexico's largest bank, on Friday was close to selecting a takeover bid, either from rival Grupo Financiero Banamex-Accival SA or from Spain's Banco Bilbao Vizcaya Argentaria SA.

Bancomer, which agreed Thursday to pay about $292 million in cash or a combination of cash and stock to buy the regional bank Banca Promex SA, said it needs to decide soon because a delay could hurt its businesses.

"We will make a decision in just a few days, because it isn't convenient to let the time run with this type of event," Bancomer chairman Ricardo Guajardo said at a press conference to unveil details of the Banca Promex acquisition.

Bancomer officials said the Promex deal should not alter its decision, because both Banamex and BBVA, as the Spanish bank is known, accounted for the move when they made their offers.

Bancomer negotiated the Promex deal with the state-owned Bank Savings Insurance Institute two years ago. Terms of the purchase, which was announced in May 1998, did not change other than for adjustments for interest rate costs of the past two years.

The Mexican bank will pay the government either $292 million in cash or $2.27 million plus 145.8 million shares for Promex, which was taken over by the government after it failed to meet minimum capital requirements.

If the government's banking institute prefers to receive Bancomer shares, it will acquire a 2.7% stake in Promex. The government is expected to make a decision before August.

Buying Promex would move Bancomer past Banamex in assets, loan deposits, and outstanding loans. It also would boost the combined reserves of the two banks to 99% of problem loans, from about 80%.

Bancomer also plans to buy back about $86.2 million of Promex convertible bonds. The bank, though, plans to offer only 25 cents per dollar of debt.

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