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Banco do Brasil Said to Seek 75% Banco Votorantim Stake

Banco do Brasil SA, the biggest Latin American lender by assets, is in talks to buy the Banco Votorantim SA preferred shares it doesn’t already own and boost its stake in the company’s total capital to 75 percent, two people with direct knowledge of the plan said.

The companies are still discussing the proposed transaction and no estimate of the cost was available, the people said, asking not to be identified because the discussions are private. Banco do Brasil already holds 49.99 percent of the voting shares and 50 percent of the preferred shares of Sao Paulo-based Banco Votorantim.

A deal would give Banco do Brasil more revenue from Banco Votorantim, and the government-owned company could use Votorantim’s local brokerage to build an investment bank with a more flexible wage policy than state-controlled companies must follow, the people said.

Banco do Brasil is also seeking to expand in auto loans, paycheck loans and credit for mid-size companies to counter increasing competition from local banks.

Votorantim Financas SA, which owns 50.01 percent of Banco Votorantim’s voting shares, said in a statement this afternoon that control of the bank isn’t being negotiated. In a separate statement, Banco do Brasil said that it isn’t seeking control of the lender and that no public equity offering is being considered.

Votorantim Financas and Banco do Brasil injected a total of 2 billion reais ($980 million) into Banco Votorantim last year to reinforce the lender’s capital.

Banco do Brasil is studying the idea of taking a bigger stake in Banco Votorantim, according to a regulatory filing in the morning. A transaction would involve only preferred shares, Brasilia-based Banco do Brasil said, adding that no agreement has been made.

To contact the reporter on this story: Cristiane Lucchesi in Sao Paulo at clucchesi5@bloomberg.net

To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net

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