9 July 2014
Latin America’s largest bank merger in recent years, between Brazil’s Itaú-Unibanco and Chile’s CorpBanca, is in the balance after a key minority shareholder said it was seeking an independent evaluation of the transaction.
The International Finance Corporation, the private sector investment arm of the World Bank, said it wanted to study the potential benefits of the $3bn deal for CorpBanca’s controlling shareholder, CorpGroup, controlled by Chilean billionaire Alvaro Saieh and his family.
“IFC will seek an independent international evaluation to assess the financial agreement and the potential benefits that may result from this transaction for CorpGroup, its shareholders and/or its affiliates,” said the IFC.
The proposed transaction is the subject of a New York lawsuit by another foreign minority shareholder in CorpBanca, Cartica Capital, which alleges that it inordinately benefits Mr Saieh’s CorpGroup at the expense of other investors.
The IFC and Cartica Capital are understood to be in favour of a merger with Itaú because of the greater scope Brazil’s biggest private sector bank would lend to CorpBanca’s operations.
The IFC holds about 5 per cent and Cartica Capital 3 per cent of CorpBanca. But Cartica Capital has alleged that Mr Saieh negotiated separate terms with Itaú without properly informing other shareholders, including a package of exclusive financial benefits such as financing at preferential interest rates, a cash payout and a call option.
Itaú and CorpBanca counter that they have disclosed more than they are required to under Chilean regulations and that the deal benefits all shareholders equally.
The position of the IFC is considered crucial in the deal because its consent is required for the transaction to go ahead, CorpBanca said separately in a filing to SVS, Chile’s securities regulator.
CorpBanca said the IFC’s evaluation would be done in addition to existing assessments performed by Goldman Sachs and Bank of America Merrill Lynch.
The IFC said its assessment would take into account CorpGroup’s obligations under an existing shareholder agreement with the Chilean controlling shareholder. It did not elaborate what these obligations were.
“This evaluation is expected to complement the fairness opinions produced by other parties which did not cover these aspects of the proposed transactions,” the IFC said.
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