Citigroup To Sell Shares Of Brazil's Redecard
February 26 2009 - 6:15AM
Dow Jones News
Citigroup Inc. (C) is planning to sell its shares in Brazilian
credit card networking services provider Redecard SA (RDCD3.BR)
through a secondary offer on the Brazilian Stock Exchange, or
Bovespa, Redecard said in a statement late Wednesday.
The shares will be sold in Brazil and also to foreign investors
in the form of Global Depositary Receipts, or GDRs.
The company didn't give the exact amount of shares to be offered
by Citigroup nor a timetable for the operation, which still must be
approved by Brazilian Securities Commission, or CVM.
Citigroup could raise around 2.94 billion Brazilian reals ($1.23
billion) based on Redecard's closing price Wednesday of BRL25.66 on
the Bovespa.
Redecard is jointly controlled by Brazilian banking giant
Itau-Unibanco and Citigroup. Currently, Itau-Unibanco has a
combined 46.42% stake in Redecard, while Citigroup has a 17%
stake.
Itau-Unibanco was formed late last year by the merger of Itau
(ITU), at that time Brazil's third-largest bank, and Unibanco
(UBB), at that time the country's fourth-largest bank.
On Wednesday, the president of Itau-Unibanco, Roberto Setubal,
said that the bank isn't interested in buying a Citigroup (C) stake
in Redecard.
"We are already the holder of a controlling stake in Redecard,"
Setubal said at a news conference. "We are not interested in making
Redecard into a subsidiary of the bank. We prefer to have other
banks as our partners in Redecard. Redecard was designed to have a
number of banks as partners."
-By Rogerio Jelmayer, Dow Jones Newswires; 5511-2847-4521;
rogerio.jelmayer@dowjones.com