BTG Pactual and EFG International fought for months over the price of a deal. Now, the Brazilian investment bank wants to get cozy with the Swiss private bank.
Investment bank BTG Pactual wants to hold onto a 30 percent stake in private bank EFG International, «Reuters» reported on Wednesday, citing sources. This means that the Sao Paolo-based investor will be a fixture at EFG, alongside Greece's wealthy Latsis family, which owns 44.2 percent of the bank.
BTG took the stake as part of a cash and stock deal to sell Banca della Svizzera Italiana, or BSI, in a fire sale. The Brazilian bank eventually took 454 million Swiss francs worth of EFG shares in return for BSI. Remarkably, BTG doesn't want to cash out: the value of those shares has surged to 785 million francs since the deal concluded in July. Why not take the more than 300 million franc gain?
Discount on BSI
BTG, which was forced to dump BSI during a corruption scandal around founder Andre Esteves two years ago, apparently sees potential for EFG's shares to rise further. Esteves was released from house arrest last year and has since taken over BTG Pactual again.
The Brazilian bank's coziness with EFG is surprising because the two firms haggled for months over the deal price when BSI imploded under the 1MDB corruption scandal mid-way through the sale. One year later, the two agreed to lower the deal price to 971 million francs, from 1.06 billion originally to account for BSI's weakened state after the damage wrought by 1MDB.
