Current terms benefit billionaire Alvaro Saieh, Corpbanca’s controlling shareholder, at the expense of minority investors, according to a letter sent yesterday by Washington-based Cartica Capital LLC. Corpbanca, Chile’s fifth-largest lender, held a conference call with investors today after Cartica asked the board to reject the deal as it is structured and proceed with a sale through a tender process.
Itau, Latin America’s largest lender by market value, and Saieh’s holding company CorpGroup Banking SA announced Jan. 29 that Itau would inject $652 million of capital and merge its Chilean and Colombian units with Corpbanca in exchange for 172 billion new Corpbanca shares. Itau would get a 33.58 percent controlling stake under a shareholder agreement with CorpGroup.
“The law in Chile is clear that a tender process isn’t required” because the transaction is a merger, not an outright sale, Felipe Larrain, Corpbanca’s legal counselor, said on the call with analysts today.
Corpbanca plans to release within a few weeks the details of how it valued the transaction and how the shareholder agreement between Itau and Saieh will be structured, investor relations chief Claudia Labbe said on the call.
Labbe said that CorpGroup doesn’t plan to use any funds from a $950 million credit line that Itau has agreed to provide because it will serve only as a “safety net” while CorpGroup negotiates covenant waivers with its creditors. Cartica said yesterday that the credit line was one of several “disproportionate” considerations handed out to CorpGroup to the detriment of minority holders.
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