Santander Taps Credit Suisse for Citigroup Brazil Bidby and
Spanish bank hires Lazard for bid on Citigroup Argentina unit
Banco de Galicia said to get advice from Goldman on Argentina
Banco Santander SA, Spain’s biggest bank, hired Credit Suisse Group AG to advise on its negotiations to buy Citigroup Inc.’s retail assets in Brazil, people with knowledge of the matter said.
Santander, whose Brazil unit generates about 19 percent of the Madrid-based company’s revenue, also hired a Lazard Ltd. venture in Argentina to advise on its proposal to buy Citigroup’s assets in that country, the people said, asking not to be identified discussing private talks. The Spanish company didn’t make a bid for Citigroup’s Colombia unit, which is also for sale, the people said.
Itau Unibanco Holding SA, Brazil’s biggest bank by market value, and Banco Safra SA, the lender owned by billionaire Joseph Safra, bid only for the Brazilian assets, according to the people. No firm is seeking all three, the people said.
Citigroup said in February it would sell its retail-banking and credit-card operations in the three countries, and hold on to the businesses that serve institutional and corporate clients there. The New York-based company’s retail operations never achieved the kind of scale needed to succeed in Brazil and Argentina, industry analysts said at the time. Banco Santander Brasil SA Chief Executive Officer Sergio Rial said last month that the company was interested in the Citigroup business, without providing more details.
Citigroup’s local businesses had a book value of 5 billion reais ($1.54 billion) in Brazil as of December, 1.7 trillion Colombian pesos ($590 million) in that country as of September, and about 10.3 billion Argentine pesos ($691 million) in net equity there.
In Argentina, Banco Macro SA hired JPMorgan Chase & Co. as an adviser, while Banco de Galicia y Buenos Aires SA hired Goldman Sachs Group Inc., the people said. The asset is valued at as much as $300 million, one of the people said.
In Colombia, bids were made by Grupo Aval Acciones y Valores SA and Bank of Nova Scotia, according to one person.
Citigroup expects to announce sales in September, Helio Magalhaes, the bank’s CEO in Brazil, said earlier this month. Magalhaes doesn’t see major obstacles to approval by Brazil’s antitrust regulator, known as Cade, he said.
Tito Labarta, an analyst at Deutsche Bank AG, said Citigroup’s Brazil unit could be worth as much as 7.9 billion reais in a report on June 21, adding that the business could receive offers up to 1.6 times book value. He said a purchase could make strategic sense for Santander, “however, the acquisition would not significantly improve the bank’s domestic position, as it would still lag its main peers.” Itau was “seen as most price-sensitive,” Labarta said.
Officials at Santander, Scotiabank and Lazard didn’t reply to e-mails seeking comment. Citigroup, Credit Suisse, Itau, Safra, Macro, Galicia, JPMorgan, Goldman Sachs and Grupo Aval declined to comment.