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Brazil's Itau raises $956 million with XP share sale - Reuters

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SAO PAULO, Dec 3 (Reuters) - Itau Unibanco Holding SA has raised at least $956.4 million by selling a 4.4% stake in brokerage XP Inc in a share offering, a securities filing late on Wednesday said.

Itau paid 6.3 billion reais ($1.21 billion) for a 49.9% stake in XP in 2019, showing that this has been a profitable deal for Brazil’s biggest bank.

XP’s shares were priced at $39 in the share offering, down 3.5% from its closing price on Wednesday.

Itau’s decision to divest its 46% stake in XP comes after its plans take control of the major fintech group in 2017 were blocked for antitrust reasons two years later.

After the share offering, Itau’s stake in XP will drop to between 41.1% to 40.5%, depending on the sale of overallotments, the lender said in a filing on Thursday. Excluding fees, Itau said it raised $935 million.

Itau said last month it would spin off a 41% stake in XP into a separate company, which will be directly owned by the bank’s shareholders. The bank also said it would sell a 5% stake in XP in a share offering.

Itau’s CEO Candido Bracher said last month the bank is willing to buy an additional 12.5% stake in XP in 2022.

Under this agreement, Itau will buy shares in XP at a pre-fixed value, lower than current market prices, if the transaction is approved by regulators.

XP also raised $278.1 million in the share offering to fund growth and new products.

The brokerage also said in the filing both the company and Itau may sell an overallotment of additional 4,135,122 shares as part of the share offering.

$1 = 5.2180 reais Reporting by Carolina Mandl. Editing by Jane Merriman

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