BTG Raises $490 Million in Stock Sale Seen as M&A Signal
BTG Raises at Least $392 Million in Stock Sale Readying for M&A
(Bloomberg) -- Banco BTG Pactual SA, the investment bank controlled by billionaire Andre Esteves, raised about $490 million to ramp up its digital efforts, a move that could be a precursor to acquisitions.
The bank sold at least 35.6 million units -- a bundle of voting and non-voting stock -- at 74.40 reais apiece on Monday, according to a regulatory filing, confirming an earlier Bloomberg report. The amount includes an over-allotment the bank said it also sold, taking the total deal to 2.65 billion reais.
BTG’s units closed Monday’s session at 76 reais each.
BTG, usually associated with investment banking and sales and trading activities, created its digital initiative in 2016 to diversify funding and revenue sources. The effort is similar to Goldman Sachs Group Inc.’s strategy of developing its online lender, Marcus.
The share sale will allow BTG to look for merger-and-acquisition targets, taking advantage of liquidity needs smaller fintech firms may have in the aftermath of the global pandemic, Morgan Stanley analysts wrote in a report, citing talks with BTG’s top officials.
BTG’s investment bank managed the transaction along with Banco Bradesco BBI, Banco Itau BBA and Banco Santander Brasil. Existing shareholders didn’t sell any shares in the deal.
BTG’s plans to accelerate its digital venture have spurred a fresh wave of optimism among analysts, with UBS Group AG increasing its price target to 92 reais from 54 reais after the deal was announced. According to the Swiss bank, BTG’s digital unit is worth about 14 billion reais.
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