Corpbanca Moves up Colombian Banking Ladder

Chile’s Corpgroup is set to increase its scale in Colombia following an agreement to purchase Helm Bank for an expected $1.28bn. Helm had long been rumored to be for sale while international players paid high premiums to scoop up other Colombian banks in the past year. The deal, seen as coming cheaper than other recent Colombian FIG deals, follows on from the group’s $1.23bn purchase of Santander Colombia and makes Corpbanca Colombia’s fifth-largest bank. “The price paid in our opinion is reasonable for a transaction of this nature,” Bolsa y Renta says in a report, noting it is 5.4% below what the brokerage had previously estimated a sale of the Helm to bring. The valuation represents 15.1x 2012 price/earnings and 1.78x book value, the shop says. Corpbanca sees 14.2x 2012 p/e and 1.63x book, it says. The levels Corpbanca estimates indicate a premium of 11.6% to the average levels seen in the most recent Colombian FIG deals but also a 40.0% discount to the book values, Interbolsa says in a report. In the deal, Corpgroup buys 91% of Helm’s shares from its controllers, it says, for $0.28 per share, and will follow up with a public offer for the remainder. This price represents a slight premium to Monday’s COP487 ($0.27) close. Shares closed Tuesday at COP482, and have risen 58% this year. Corpgroup also agreed to pay $17m for 80% of Helm’s insurance unit. Corpbanca Chile plans to raise $600m in equity capital, including the approximately $225m that the IFC agreed to pay for 5% of the bank last week. Corpbanca Colombia plans a separate raise of up to $1bn, of which Helm’s controllers will buy $440m and Corpbanca controllers $285m. Inverlink advised Helm. Simpson, Thacher & Bartlett and Pose Herrera were legal advisors to Corpgroup, which does not return a request for comment on financial advisors. At the end of the process, Corpgroup expects to hold 64% of Corpbanca Colombia, and the Helm controllers 20%. Cross-border subordinated bonds could also help fund the acquisi