Qatari Fund to Sell $900 Million Holding in Santander Brazil

  • Qatar will sell approximately 40 percent of 5.5% position
  • Wealth fund selling stake after shares rally in the past year

Qatar Investment Authority, the Persian Gulf country’s sovereign wealth fund, is selling as much as $900 million-worth of shares in Banco Santander SA’s Brazilian unit, taking advantage of a more than 75 percent rally in the stock over the past year.

The Qataris are offering 80 million units composed of one common share and one preferred share in Banco Santander (Brasil) SA to international investors in a sale being underwritten by banks including Credit Suisse Group AG and Bank of America’s Merrill Lynch unit, according to a prospectus sent on Tuesday. Units are being offered in the form of American depositary shares, which closed at $9.77 yesterday on the New York Stock Exchange.

Qatar, the world’s biggest exporter of liquefied natural gas, is a major investor on both sides of the Atlantic. It owns London landmarks such as the Harrods department store, The Savoy hotel and the Shard skyscraper. It also owns stakes in Credit Suisse and Deutsche Bank AG.

“This transaction forms part of the routine portfolio management activities undertaken by QIA from time to time," the fund said in an e-mailed statement. “QIA has been an investor in Santander Brasil for close to 7 years and, following the completion of this offering, expects to remain the second-largest shareholder of Santander Brasil after Banco Santander."

QIA holds approximately 5.5 percent of Santander Brasil’s equity and intends to sell about 40 percent of that stake, according to the statement. Qatar also agreed an overallotment option of 12 million shares.

Defended Business

Spain’s biggest bank owns about 90 percent of its Brazilian unit after buying out most minority shareholders in 2014. Banco Santander Chairman Ana Botin has defended the lender’s Brazilian business even as an economic slowdown and doubts about the country helped erode the bank’s shares in 2015. Brazil is Santander’s largest market, contributing 21 percent to the group’s profit.

Like other nations in the oil-producing Gulf region, Qatar has been hit by a more than halving of oil prices since the middle of 2014 that has hurt state revenue. The country raised $9 billion in May last year from a sale of bonds, until then the region’s biggest such issue, to help bridge a budget deficit.

Shares at the Brazilian unit are up 3.7 percent since the start of the year, valuing the unit at 116.4 billion reals ($37 billion) and about 44 percent in the past year. The group’s shares have risen about 15 percent.

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