U.S. private equity fund Lone Star has decided to sell its 75% stake in Novo Banco to French banking group BPCE in a deal that would value Portugal's fourth-largest lender at around 7 billion euros ($8.

Lone Star and the French banking group BPCE agreed on the sale of Novo Banco, for €6.4 billion for 100% of the share capital.

Lone Star Funds owns 75% of Novo Banco, with the Portuguese government holding a 25% stake through various entities.