• EFG was top bidder and will probably start exclusive talks: FT
  • Zurich-based EFG oversaw 80 billion Swiss francs as of June

Grupo BTG Pactual AG, the Brazilian investment bank trying to shore up cash after its founder’s arrest, is in talks to sell its Swiss bank BSI to EFG International AG, according to a person with knowledge of the matter.

EFG is the main interested party, said the person, who asked not be identified because the talks are private. The company, controlled by Greek billionaire Spiros Latsis, was the highest bidder and is likely to enter into exclusive negotiations on a transaction that could value the company at 1.2 billion Swiss francs ($1.2 billion), the Financial Times reported earlier Tuesday, citing anonymous sources.

BTG acquired BSI from Italy’s Assicurazioni  Generali SpA for 1.25 billion Swiss francs in September. Zurich-based EFG oversaw 80 billion francs for clients at its banks in Europe, Asia and the Caribbean at the end of June while BSI had about 82 billion francs in assets under management.

A representative for EFG declined to comment, as did an official at BTG.

BTG’s then-Chief Executive Officer Andre Esteves was arrested in November amid a widespread corporate corruption scandal. Esteves, who has since been released from jail and is under house arrest, has denied any wrongdoing through his lawyers.

Last week, BancaStato, or Banca dello Stato del Cantone Ticino, said it made a non-binding offer for BSI that was backed by two partners.

Asset Sales

BTG’s asset sales have helped reverse at least part of the collapse in its stock and bond prices. It previously agreed to sell its distressed asset-management firm, Recovery do Brasil Consultoria SA, to Itau Unibanco Holding SA for 640 million reais ($158 million). It also sold its remaining stake in hospital chain Rede D’Or Sao Luiz SA to Singaporean sovereign-wealth fund GIC Pte for 2.38 billion reais. Its parking-lot company, Allpark Empreendimentos Participacoes e Servicos SA, known as Estapar, has attracted interest from private equity investors, people with knowledge of the matter said in December. It could fetch 1.5 billion reais, two separate people said at the time.

BTG’s $1.3 billion in contingent convertible securities have stabilized at about 70 cents on the dollar after reaching 40 cents on Dec. 9.

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