Reuters – JC Flowers Selling Down BTG Pactual Stake

U.S. buyout firm JC Flowers & Co. is selling 40 percent of its stake in Brazilian investment bank giant BTG Pactual Group, according to analysts at Bradesco BBI, a day after the stock suffered its steepest fall in eight months. Units of BTG Pactual fell 4.3 percent to 31.50 reais on Thursday after the announcement of a planned block sale by an unnamed investor, which priced the stock at a 10 percent discount to Wednesday’s close.

(Reuters) – U.S. buyout firm JC Flowers & Co is selling 40 percent of its stake in Brazilian investment bank giant BTG Pactual Group (BBTG11.SA), according to analysts at Bradesco BBI, a day after the stock suffered its steepest fall in eight months.

Units of BTG Pactual fell 4.3 percent to 31.50 reais on Thursday after the announcement of a planned block sale by an unnamed investor, which priced the stock at a 10 percent discount to Wednesday’s close.

Bradesco analysts said on Friday New York-based JC Flowers, led by former Goldman Sachs Group Inc investment banking star Christopher Flowers, would be selling 6.53 million units of BTG Pactual at a minimum 29.50 reais ($14.46) a piece later on Friday. Units are a blend of common and preferred stock of BTG Pactual’s investment banking and private equity divisions.

The amount put up for sale represents 40 percent of the stake that JC Flowers owns of BTG Pactual – which is about 1.8 percent of the Brazilian bank’s capital. JC Flowers has announced its intention to sell its full stake in BTG, which is valued at about $250 million, since the bank was listed in April last year.

“Expectations of the sale by JC Flowers have been weighing down on shares of BTG recently,” Firetti and his team wrote in a client note. “The sale may also help increase stock liquidity,” they said, referring to the about 9.2 million average trading volumes for BTG Pactual stock in the São Paulo Stock Exchange.

A London-based public relations executive representing JC Flowers declined to confirm whether the company plans to exit part or all of its stake in BTG Pactual.

BTG Pactual had said in a regulatory filing on Thursday that an unnamed shareholder, which was neither a member of BTG Pactual’s controlling bloc nor part of the bank’s management, was planning to auction off the shares.

News of the JC Flowers sale comes at a time when shares of BTG Pactual have traded above their initial public share offer price for more than two weeks.

Prior to the bank’s $2 billion IPO, Chief Executive André Esteves sold a 10 percent stake in BTG in December, 2010 to sovereign wealth funds and a pool of investors, including JC Flowers and Italy’s Agnelli, Colombia’s Santo Domingo and Panama’s Mota families.

The identity of the selling shareholder may become formally known only when the transaction is concluded on Friday after 1045 local time (1245 GMT).

(Reporting by Guillermo Parra-Bernal; Editing by Greg Mahlich)

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