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Banco Patagonia sees BB tender offer unsuccessful on higher current stock price - Argentina, Brazil
Tuesday, November 9, 2010
Argentina's Banco Patagonia believes a mandatory tender offer from Brazil's federally controlled Banco do Brasil (BB) aimed at minority shareholders will be unsuccessful, as Patagonia's current share price is higher than when the deal was signed, Ruben Iparraguirre, Patagonia's CFO, told a conference call.
BB agreed in April to pay US$480mn - or US$1.31 per share - for the 51% stake held by Patagonia's controllers, the Stuart Milne brothers.
On October 28, the Brazilian central bank BCB authorized BB to increase its stake in Banco Patagonia to as much as 75%, a necessary condition to move forward with the mandatory tender offer aimed at minority shareholders.
The tender offer will be launched at the same price paid to controlling shareholders plus a 0.5% annual interest rate.
Iparraguirre said he sees the transaction's price adjusting slightly to US$1.3110-1.3115 per share, but as Patagonia's stock is trading at almost US$1.50, most investors will not be interested in the offer. Argentine law mandates that the bidder must make an offer to minority shareholders of the same price offered to the controlling shareholders.
The deal must still be approved by Argentina's central bank BCRA and the country's antitrust agency CNDC, which Patagonia executives said could happen by February or March next year.
Regarding the operational impacts of BB's incorporation into Patagonia's ownership, Iparraguirre said the bank will see assets grow significantly in less than a year as Brazilian corporates operating in Argentina will begin doing more business with the bank.
Patagonia mainly offers products and services for middle market companies, SMEs and individuals.
Banco Patagonia reported a 141mn-peso (US$35.6mn) profit in 3Q10, up 5.3% compared to the same quarter 2009, boosted by strong gains on public sector assets and a 54.7% annual growth in loans as of end-September to 6.00bn pesos, or double the system's average.
To read Banco Patagonia's full earnings release, go to this link
Jorge Porter
Business News Americas
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