SoftBank’s Investment in Banco Inter Sends Stock Soaring

(Bloomberg) -- SoftBank Group Corp. has chosen the next target for its Latin America expansion, and it’s one of the region’s stock-market darlings.

Banco Inter SA, whose shares have quintupled since its 2018 initial public offering, sold additional equity on Monday and SoftBank purchased almost all of it, three people familiar with the transaction said. Existing stockholders used their rights of preference to buy some as well, according to the people, who asked not to be identified because the information isn’t public.

The lender sold 31 million units -- a bundle of two common shares and one preferred -- for 39.99 reais apiece, raising 1.25 billion reais ($330 million), according to a regulatory filing. The figure included an overallotment that was also sold.

Banco Inter’s units jumped as much as 21% Tuesday in Sao Paulo, reaching 49 reais. Brazil’s benchmark Ibovespa index was little changed. Inter’s preferred shares gained the most since the bank’s IPO.

“SoftBank’s anchoring of Banco Inter’s offering was welcomed by markets and reinforces our constructive view for the bank,“ Carlos Daltozo, Eleven Financial Research’s head of equities, said in a phone interview. “Banco Inter may be able to aggregate in its app a range of non-banking services from other companies SoftBank invests in.”

The deal marks the Tokyo-based firm’s second foray into Brazil’s fast-growing fintech industry. Funds managed by SoftBank led a $231 million investment in Brazilian fintech firm Creditas Solucoes Financeiras Ltda. earlier this month, tripling the online lender’s valuation. SoftBank also had preliminary talks with credit-card fintech Nubank in June for a possible investment, people familiar with the matter said at the time.

SoftBank and Banco Inter declined to comment.

Read more about SoftBank’s other Brazil investments

Banco Inter’s preferred shares have surged more than 400% since the bank went public, among the best-performing IPOs in the region, according to data compiled by Bloomberg. The company, which started as a real estate-focused bank, reinvented itself as an online lender, offering digital accounts and zero-fee products while also selling different types of investments and brokerage services. Inter said it plans to use proceeds from the sale to boost its credit operations, invest in technology and new products, and make strategic acquisitions.

Banco Bradesco BBI SA was the lead coordinator of the deal, with Caixa Economica Federal, Goldman Sachs Group Inc., Banco BTG Pactual SA, JPMorgan Chase & Co. and Banco Santander SA also part of the sales team.

To contact the reporters on this story: Vinícius Andrade in São Paulo at vandrade3@bloomberg.net;Felipe Marques in Sao Paulo at fmarques10@bloomberg.net

To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Steve Dickson, Steven Crabill

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