Sept. 23 (Bloomberg) -- Inversiones La Construccion SA, which controls Chile’s second-largest pension fund manager, posted a record rally after agreeing to buy the insurance businesses of billionaire Alvaro Saieh.
Shares of the company also known as ILC jumped 5.2 percent to 7,100 pesos at the close in Santiago, the biggest gain since its listing in July 2012. The IPSA benchmark index advanced 3.4 percent, the most since October 2011.
ILC, which owns a controlling stake in AFP Habitat SA, the largest pension fund manager in Chile by assets under management after AFP Provida SA, agreed to pay $170 million in cash, plus assumption of debt, for a 67 percent stake in Corp Group Vida Chile SA, the insurance company owned by Saieh, according to a statement posted today on the website of Chile’s securities regulator.
The deal “will give ILC a presence in the annuities market and may fit well with its other businesses,” Jason Barratt, an analyst at brokerage BICE Inversiones in Santiago, said in a phone interview.
Saieh has agreed to provide $300 million by year-end for SMU SA, a retailer he controls. It recorded a record loss in the second quarter and announced in July a debt-covenant breach related to accounting errors. SMU is also selling some assets to pay debt and fund operations.
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