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BTG Sells Biggest IPO for Investment Bank in Two Years

Andre Esteves, chief executive officer of Banco BTG Pactual SA. Photographer: Jin Lee/Bloomberg
Andre Esteves, chief executive officer of Banco BTG Pactual SA. Photographer: Jin Lee/Bloomberg

April 25 (Bloomberg) -- Banco BTG Pactual SA, the Brazilian bank led by billionaire Andre Esteves, is raising as much as 3.66 billion reais ($1.95 billion) in the biggest initial public offering for an investment bank in two years.

The IPO units, which represent shares in BTG and its private-equity arm, are being sold at 31.25 reais each, valuing the company at $14.5 billion, the Sao Paulo-based bank said in a statement. BTG had said previously it expected a price of 28.75 reais to 33.75 reais. The bank is selling 93.6 million units in new capital and previous shareholders are selling 23.4 million units.

BTG’s IPO was the largest for an investment bank since Huatai Securities Co.’s $2.3 billion offering in Shanghai in 2010, and the company is the first stand-alone investment bank to go public in Brazil, according to data compiled by Bloomberg. Brazilian banks have benefited from a rebound in the benchmark Bovespa stock index this year and on signs Europeans may resume investing in emerging markets as the debt crisis there eases.

“I’m happy to take any sign as a positive these days, but I think it’s most apt to be peculiar to the Brazilian environment, and not so much an indication of how things are going worldwide,” Gary Townsend, head of Hill Townsend Capital LLC, which manages about $40 million, said in a phone interview.

The units, which represent a total of three shares of the bank and three shares of BTG’s private-equity firm, will begin trading in Sao Paulo and Amsterdam on April 26. BTG plans to use the proceeds to “continue expanding its businesses” and to improve its “funding structure,” according to a regulatory filing.

Banco Santander

The bank’s IPO is the biggest in the Brazilian exchange, BM&FBovespa SA, since Banco Santander Brasil SA, a subsidiary of Madrid-based Banco Santander SA, raised a record 13.2 billion reais in October 2009. It’s the second IPO in Brazil this year.

Italy’s Agnelli family and J.C. Flowers, the New York-based private-equity firm founded by financier J. Christopher Flowers, are part of a group that paid $1.8 billion in December 2010 for a stake of almost 19 percent that valued BTG at about $10 billion at the time.

Mexico’s IPO market is also showing signs of revival with the planned sale today of shares in Alpek SAB, the country’s largest privately owned petrochemical company. Alpek’s parent, Alfa SAB, is selling a stake to raise as much as 11.2 billion pesos ($850 million) in the first IPO in Mexico in nine months.

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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