Itau Unibanco Holding SA’s bid to increase its stake in its Chilean bank unit to two-thirds may fall short after a minority shareholder presented a counteroffer just hours before the deadline.
(Bloomberg) — Itau Unibanco Holding SA’s bid to increase its stake in its Chilean bank unit to two-thirds may fall short after a minority shareholder presented a counteroffer just hours before the deadline.
Latin America’s largest private lender has given equity holders in Itau Chile until 5:30 p.m. Wednesday to accept a 8,500 peso-per-share offer for the 74.4 million outstanding units. But this morning, Santiago-based brokerage firm LarrainVial offered to buy as many as 4 million Itau Chile shares at 8,550 pesos each in the name of a client.
That represents most of the 4.7 million shares that had been offered to Itau by the close on Tuesday, according to data from the Santiago Exchange. Those shares would have given Itau holding about 67.8% of the bank, just above the two thirds majority it needs to make major changes to the company without the support of other shareholders. The offers are non-binding and holders have the right to withdraw them, according to local press reports.
“They’re offering a price way below its book value and that’s a bit absurd,” Gutenberg Martinez, a partner and investment manager at Quest Capital, which holds Itau Chile shares, said before the counteroffer was announced. “It’s hard to understand Itau’s justification.”
Itau Chile’s current book value per share is 15,540 pesos, according to data compiled by Bloomberg. What’s more, the bid was only 7% above to the stock’s price when the offer was announced on March 2.
A two-thirds majority would give Itau the right to take major decisions such as dividing or merging the lender, reducing capital, changing its domicile. The bank hasn’t stated a minimum amount of shares to declare the offer a success.
A group of Itau Chile shareholders including MBI Inversiones, Falcom AGF and Consorcio SA have been calling for a higher offer. If Itau is very aggressive in terms of squeezing value from minority holders such as pension funds and insurance companies it could be detrimental for them in the long run as they are the buyers of its bonds and deposits, Renato Sepulveda, chief financial officer of Consorcio said in an interview with Diario Financiero in April. At the time they said it should be at least 20% higher.
Still Itau Unibanco won’t increase the offer, the lender said in an emailed response to questions.
“Minority shareholders are free to join the Tender Offer as it is voluntary,” Itau said. Chilean securities law says that for stocks with high trading volumes, known as presencia bursatil, the minimum price in a tender offer has to be the average trading price between four and one months before shareholders vote on the offer. That would have been 8,410 pesos, according to Itau, “and the offer is therefore, fair.”
(Updates with counteroffer starting in the first paragraph.)
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