Shares in Banco Popular rose more than 4 per cent on Monday after an unidentified group of investors, believed to be from Mexico, said they were looking to buy a 20 per cent stake in Spain’s third-largest listed bank.

Blueprime Ltd, a UK-registered entity acting on behalf of the consortium, said it had already agreed the purchase of a 3.5 per cent holding in the bank from Trinitario Casanova, a Spanish property developer.

The acquisition, at €14.20 a share, is conditional on Blueprime securing options on at least 20 per cent of the equity. The offer price represents a 50 per cent premium over Friday’s stock market close and values the entire bank at about €17.5bn.

Blueprime said no other accords had been signed, although it was close to finalising agreements with “a number of other shareholders with whom we are in advanced negotiations”.

Many of the bank’s largest investors, including Portuguese billionaire Américo Amorim, have publicly said they would not sell their Popular stakes, despite the premium. Mr Amorim, who holds a board seat, said last week that speculation about the sale of his 7.8 per cent holding was “without foundation”.

Bank officials said on Monday they knew “nothing more than had been filed with the stock market regulator”.

Popular, which last month reported a 12 per cent year-on-year rise in net income, is also well-armed against a hostile takeover. Its armoury includes a 10 per cent cap on voting rights, a loose shareholders pact covering about 15 per cent of the equity, and a board that directly or indirectly controls about 40 per cent of the capital. The Bank of Spain must also approve stake-building in the country’s financial institutions.

Nonetheless, Banco Popular, with its easily digestible size and sector-leading efficiency ratios, has long been viewed as an attractive takeover target or a strategic investment play on future bank consolidation in Spain and Europe.

In a similar move, Crédit Agricole of France late last year agreed to pay €809m to lift its stake in Bankinter, a smaller listed bank, to about 20 per cent.

Spain’s housing downturn and rising bad loans rate have punished shares in the country’s banks, despite their lack of direct exposure to subprime mortgage securities.

Popular’s shares have lost about 30 per cent of their value in the past 12 months, while non-performing loans have climbed from 0.73 per cent of the loan portfolio at end-March 2007 to 0.98 per cent at the same stage this year.

Fitch, the credit rating agency, recently knocked the bank’s individual rating down a notch, from A to A/B on broad concerns about the Spanish banking sector. But Popular remains the highest-rated of the country’s financial institutions.

Popular’s shares closed up 4.6 per cent at €9.80.