Chile's CorpBanca in merger talks with four banks -report

Thu Nov 28, 2013 12:19pm EST
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SANTIAGO Nov 28 (Reuters) - Chile's CorpBanca is in takeover talks with four other banks as its owner Alvaro Saieh seeks to create a larger regional player, local online news site El Mostrador said on Thursday.

Saieh is in talks with Brazilian bank Itau Unibanco , Chile's BCI, Canada's Scotiabank and Spain's BBVA and all four have already made offers, the report said, citing documents it had seen prepared by Merrill Lynch, which it said was advising on the deal alongside Goldman Sachs.

According to the documents, the deal would be structured as a share swap. Itau's offer is worth just over $5 billion, Scotiabank's includes $1 billion cash and BBVA's includes between $300 million and $400 million cash, the report said.

Chilean billionaire Saieh also controls unlisted retailer SMU and the wider financial services group CorpGroup, and has been seeking to divest businesses to raise cash after an accounting error led SMU to breach debt covenants.

CorpBanca has operations in Chile and Colombia, and Saieh via CorpGroup owns a 55 percent controlling stake, according to Reuters data.

CorpBanca's shares rose 8.5 percent by 1626 GMT to 6,639 pesos, valuing it at around 2.3 trillion Chilean pesos ($4.36 billion).

The sharp rise prompted the local regulator to request that the company issue a statement to explain if there was a reason behind the share move.

CorpBanca declined to comment when contacted by Reuters.

($1 = 527.8100 Chilean pesos) (Reporting by Rosalba O'Brien and Anthony Esposito; Editing by Maureen Bavdek)