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Corpbanca Said to Plan Merger With BBVA or Itau in Jan.

Banco Bilbao Vizcaya Argentaria SA Logo
A Banco Bilbao Vizcaya Argentaria SA spokesman in Madrid didn't immediately respond to an e-mailed request for comment and phone calls to the company after office hours weren’t answered. Photographer: Antonio Heredia/Bloomberg

Dec. 24 (Bloomberg) -- Corpbanca will probably agree to a merger of assets with Banco Bilbao Vizcaya Argentaria SA or Itau Unibanco Holding SA by Jan. 15, according to a person with direct knowledge of the talks.

The negotiations are centered on which of their Latin American assets Itau or BBVA will contribute to the new bank, said the person, who asked not to be named as the talks are confidential. The partner bank will control the merged entity while Alvaro Saieh, Corpbanca’s owner, will be able to name the chairman and help set targets, the person said.

The deal will be structured in two phases: First, Saieh and Itau or BBVA will create a holding company that will own 54 percent of Corpbanca, according to the person. The partner bank will own 50.1 percent of the holding company, and Saieh the remaining 49.9 percent, the person said. Then Corpbanca merges with some Latin American assets from the partner bank, the person said.

The agreement will include a cash payment of $300 million to Corpbanca for assets that it has to sell in Colombia to meet regulators’ demands, the person said.

A BBVA spokesman in Madrid didn’t immediately respond to an e-mailed request for comment and phone calls to the company after office hours weren’t answered. Itau, based in Sao Paulo, declined to comment beyond a Dec. 20 statement in which it denied a Diario Financiero report it had reached an accord with Corpbanca.

Corpbanca shares have climbed 57 percent in Santiago since Aug. 28 when they reached their lowest since June 2010 on concern the bank would be hurt by the financially distressed retailer SMU SA, which is also controlled by Saieh. The merger of the bank won’t result in any fresh funds for SMU, Saieh told Bloomberg News on Dec. 10. Corpbanca, Chile’s fifth-biggest bank by assets, has a market capitalization of $4.8 billion.

Retail Conflict

Candido Bracher, Itau BBA’s chief executive officer, told reporters on Dec. 11 that the Brazilian bank was in talks to buy a stake in Corpbanca. A week later, Spain’s BBVA said in a filing to regulators that it was also taking part in the sale process and that it was too soon to say if an agreement would be reached.

Santiago-based Cencosud SA, Latin America’s third-biggest retailer, canceled a deal yesterday to sell its credit-card business to Itau. The Brazilian bank’s negotiations to buy Corpbanca helped derail the deal because of the Chilean bank’s 51 percent stake in SMU Corp SA, which manages a credit-card portfolio for SMU, said Andre Riva Gargiulo, an analyst at brokerage Grupo Bursatil Mexicano SA in Sao Paulo.

Colombia-born Saieh, who has a doctorate in economics from the University of Chicago and whose family immigrated to Chile when he was three years old, built Corpbanca into the country’s fifth-biggest bank.

To contact the reporters on this story: Philip Sanders in Santiago at psanders@bloomberg.net; Javiera Quiroga in Santiago at jquiroga5@bloomberg.net

To contact the editor responsible for this story: Adriana Arai at aarai1@bloomberg.net

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