BicBanco Shares Surge After Report of Sale Negotiations

Sept. 23 (Bloomberg) -- Banco Industrial & Comercial SA surged 9.9 percent, the biggest gain since March 2009, after a report that the company was in sale talks with competitors including Itau Unibanco Holding SA.

BicBanco, as the lender is known, rose to 4.90 reais at 5:05 p.m in Sao Paulo after rising as high as 5.18 reais earlier today. The benchmark Ibovespa index gained 0.9 percent.

Sale talks are under way between BicBanco, a Sao Paulo-based lender that focuses on mid-size companies, and Itau, Banco Bradesco SA, Grupo BTG Pactual and China Construction Bank Corp., O Estado de S. Paulo newspaper reported Sept. 21, without saying where it obtained the information.

“BicBanco is rising because of speculation it may be sold,” Pedro Galdi, chief analyst at brokerage firm SLW Corretora, said in a telephone interview from Sao Paulo. “These Brazilian mid-sized banks are focused on niches and get hurt once large rivals start competing in the same segment.”

BicBanco said in a regulatory filing today that “there’s no confirmation that any talks to sell control of the company may be concluded.” An official at Tamer Comunicacao Empresarial, a communications firm representing BicBanco, declined to comment beyond the filing.

A Bradesco official declined to comment on the report, asking not to be identified in keeping with company policy. BTG said it doesn’t comment on market speculation, according to an e-mailed statement.

An Itau official declined to comment in an e-mailed statement. An official at CCB didn’t respond to a telephone call after business hours in Beijing.

BicBanco’s deposit ratings were cut to junk last month by Moody’s Investors Service, which said the bank’s loan margins are under “compression” as it shifts toward lower-risk borrowers.

To contact the reporter on this story: Francisco Marcelino in Sao Paulo at mdeoliveira@bloomberg.net

To contact the editors responsible for this story: David Scheer at dscheer@bloomberg.net; Christine Harper at charper@bloomberg.net