Category: M&A

Itau was continuing discussions to buy CorpBanca on Tuesday, LatinFinance understands. A spokesperson for the bank declined to comment. BBVA, which was also said in December to be considering buying the bank, could not be reached for comment on Tuesday afternoon.

Leads closed books Monday on LQ Inversiones Financieras’ sale of 6.7bn shares in Banco de Chile, pushing ahead with the deal despite a sharp dive in equity markets. Global coordinator Citi and bookrunners Bank of America Merrill Lynch, BTG Pactual, and Deutsche Bank are set to price the transaction today. A fall in markets means the deal is likely to raise less for LQIF than initially anticipated. Banco de Chile’s American Depositary Shares — equal to 600 common shares — closed at $76.50 on Monday, down from $83.65 the day LQIF announced the sale. The share sale will trim LQIF’s holdings in the Chilean lender to 51%, from 58.4%. Banco de Chile, the country’s largest lender with a 19.3% market share, reported assets of CLP25,261bn ($50.1bn) at the end of the third quarter. Its falling share price echoed a trend across markets more broadly. Chile’s IPSA stock index closed at 3,520 on Monday, down 2.14% on the day and 4.71% on the year, as investors reacted to an abrupt devaluation in the Argentine peso last week as well as weak economic data from China and concerns over political unrest in other global emerging markets. Chris Palmer, equity portfolio manager at Henderson Global Investors in London said that the long-term impact of the recent market volatility would depend on how quickly policymakers responded by addressing fundamental economic problems. But he added that some longer-term trends were likely to continue to plague markets. “Some of the triggers for what kicked all this off — the tapering by the Fed and some inconsistent data from China — have got investors nervous. Those two things are unlikely to change this year,” he said. “The drivers of China’s economy are changing. The incoming government has some different ideas about how the growth model should work. … That’s not going to go away this year.” Aside from a handful of deals already mandated, sales of new equity by Latin American companies are expected to be minimal in the first quarter, said one ECM

Colombian firm Cementos Argos last week agreed a $720m deal with US-based Vulcan Materials to buy a number of concrete plants in Florida. The deal makes Argos one of the largest cement producers in the south-east US, doubling the firm’s production capacity in the country. The price equates to a multiple of between 2.8 and 3.6 times sales, according to Credicorp Capital The acquisition is subject to regulatory approval.

Itau-Unibanco plans to sell its major risk insurance operation in a competitive process that will begin in the coming days, the bank said on Wednesday. The Brazilian bank booked pre-tax profit of BRL1.1bn ($463.6m) in the third quarter last year from its insurance operations, including retail and commercial coverage. Itau entered a joint-venture with major risk insurer XL Capital in 2006, and took over the firm entirely in 2010.

After prompting from the Colombian regulator, Chilean lender CorpBanca said Monday it was still in discussions regarding a sale to another lender. The bank has not signed any agreement, either preliminary or final, aside from confidentiality accords, it said. The statement came after Colombia’s financial supervisor asked the local branch to update the market on the subject.

Mexican retailer Controladora Comercial Mexicana has been in discussions with local and international groups that have been interested in an “association and/or strategic sale”, the firm said last week. It added it was looking at options that could maximise share capital, but that the talks were in a preliminary phase. Comerci, as it is known, restructured debt in 2010. Moody’s rates it Ba1.

Enersis has started spending some of the $2.4bn stockpile of acquisition cash which it raised in its 2013 equity sale. The Chilean energy distributor and generator announced on Wednesday a tender offer for the shares of Brazilian firm Companhia Energetica do Ceara (Coelce) that it does not own. Enersis launched a tender offer for any and all of Coelce’s shares, offering BRL49 a piece — a 20.1% premium to the volume weighted average price over the past 30 days. Investors have until February 17 to participate in the voluntary offering. If all investors participate, Enersis will spend $645m on the deal. Under Brazilian regulations, Enersis must extend the offer by a further 90 days if more than two-thirds of the outstanding shares are tendered, to allow all investors to participate. If between one and two-thirds of the shares are tendered, investors will be pro-rated so that Enersis only buys 33%. All offers will be accepted if investors put forward less than a third of the shares in free-float. Itau is arranging the transaction, and Santander advising Enersis. Coelce, which operates in Brazil’s northeast, offers and attractive asset that benefits from a growing base of demand, Enersis’s chief financial officer Eduardo Escaffi said on a conference call with investors on Wednesday. Enersis owns 58.87% of Coelce directly and indirectly through Endesa Brasil. The free float is made up of ordinary, class A and class B shares.

Power generator Inkia Energy has announced it is considering selling its minority holding in Peruvian firm Edegel, a deal that could be worth close to $500m according to Credicorp Capital. Edegel announced Monday that Southern Cone Power, owned by Inkia through IC Power, was considering sale. An official at IC Power said the firm was not working with any single buyer, but rather announcing it intentions to the market. Inkia periodically reviews its minority holdings, the official told LatinFinance. Inkia has a 21.14% holding in Edegel through Southern Cone Power, which owns 39.01% of Edegel majority shareholder Generandes. Edegel, Peru’s largest energy producer, had a market capitalization of PEN5.57bn ($1.9bn) Tuesday. Edegel’s shares closed at PEN2.43 on Tuesday.