Banco do Brasil Said to Stall On Banco Patagonia Share Sale

Jun 16, 2017 10:16 pm ET

(Bloomberg) -- A potential share sale of Banco Patagonia SA was delayed after majority holder Banco do Brasil SA prevented a shareholder meeting of the Argentine lender.

Banco do Brasil hasn’t decided whether it will sell its 59 percent stake in Patagonia or offer new shares, according to two people familiar with the matter who asked not to be named because talks are private. The bank may hold on to its stake, one person said. The least likely option is for it to do both a share sale and sell its stake.

"Banco do Brasil won’t comment beyond what was already said to markets on the subject," a press officer from the bank said in an emailed statement. On May 18, Banco do Brasil said it continues to study alternatives for its strategy abroad.

Banco Patagonia told Argentine regulators on Thursday that it didn’t have a quorum to hold a shareholder meeting on June 21. A vote on the sale of 35.9 million shares, or 4.99 percent of capital in circulation, was scheduled for that meeting. Shareholders representing only 18.5 percent of outstanding shares confirmed attendance, according to the filing.

Banco do Brasil hired JPMorgan Chase and Co. in 2016 to help it sell Banco Patagonia. The Brazilian lender was due to receive binding offers for its stake in Patagonia on Thursday. Ahead of the final deadline, the three bidders that remained were Banco Macro SA, Itau Unibanco SA and BBVA Banco Frances SA. JPMorgan didn’t immediately reply to a request for comment.

Banco Macro raised $670 million this week in a secondary share offering aimed at growth opportunities. BBVA Frances shareholders approved a sale of 145 million new shares in July.

Read More on Banco Patagonia MNA Deal

The Brazilian bank has been considering either a secondary share offering or a sale to another lender as it seeks to catch up to rivals’ profitability. It has been closing branches and encouraging employees to retire early. In December, the Brazilian bank was favoring a public offering of at least a portion of its majority stake in Patagonia to improve the company’s valuations, Chief Executive Officer Paulo Caffarelli said in an interview in Sao Paulo.

--With assistance from Pablo Gonzalez

©2017 Bloomberg L.P.