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The
structure under discussion would leave São Paulo-based BTG
Pactual with a stake of 20 percent to 30 percent in the combined
entity, said the first source, who asked for anonymity since the
discussion remains private. Whether EFG incorporates BSI, or
vice versa, will be decided based on the most efficient tax
structure, the source said.
Both BTG Pactual and EFG confirmed they are in exclusive talks
over BSI, adding that no decision had been made yet. Shares in
EFG were up 2.4 percent at 6.74 Swiss francs in Zurich at 1146
GMT.
The deal would help BTG Pactual move on with a plan to sell
assets, raise cash and restore investor confidence in the wake
of the arrest of founder André Esteves last November. Esteves
was the architect of BTG Pactual's purchase of BSI last year,
which he said would help the independent investment bank grow
beyond Latin America.
CASH, PRICE
BTG Pactual could partly receive payment for BSI in cash, the
sources said. Zurich-based EFG and BTG Pactual agreed not to
adjust the value of the deal should BSI have to pay a fine
related to a scandal at a troubled Malaysian government fund,
1Malaysia Development Bhd, the source said.
A price has yet to be determined, although the first source said
BSI could be valued at $1.6 billion prior to any combination.
According to the second source, who was briefed on the matter,
EFG is talking to Swiss financial industry watchdog about the
impact of a combination, since BSI is the largest employer in
the Swiss canton of Ticino.
BTG Pactual and EFG, which is controlled by Greek billionaire
Spiros Latsis, have been on exclusive negotiations for about a
month, the first source added.
(Editing by Guillermo Parra-Bernal and Bernard Orr)
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