Brazilian Banco Master is waiting for M&A proposal from BTG Pactual, sources say

By Marcela Ayres and Luciana Magalhaes

Brasilia (Reuters) – Brazilian lender BancoMaster is in talks with investment bank BTG Pactual after a deal in which stated bank Brb has acquired a majority of its capital, according to two people familiar with the issue.

Negotiated assets include court order payments between 15 billion Reais and 23 billion Reais ($2.7 billion to $4.1 billion) and private equity holdings.

One source that requested anonymity because the speech was confidential, says that regardless of its outcome, Master is pursuing parallel discussions to secure international funding for the business.

The master declined to comment. BTG Pactual said earlier this week it is constantly analysing integration opportunities that bring value to bank shareholders and are supported by regulatory authorities.

The deal, released on Friday with the BRB, managed by the Government of the Federal District of Brazil, marked a dramatic new chapter in the Master’s trajectory, relying on the issuance of high-yield debt securities distributed through the investment platform, marking a dramatic new chapter in the Master’s trajectory.

The transaction, which remains subject to regulatory approval, now excludes many assets on BTG’s radar. The proposal from BTG could involve only all remaining assets or a portion thereof.

The sale comes amid growing scrutiny of BancoMaster’s fundraising strategy. The bank operates within Brazil’s banking regulations, and its critics say it is volatile due to the growth of the highly concentrated banking sector of Latin America’s largest economy.

One source said Master began cutting yields on new debt securities known as CDB on Wednesday as part of a gradual strategy to get closer to market averages after sales to BRBs.

($1 = 5.62 reais)

(Reporting by Marcela Ayres and Luciana Magalhaes of Brasilia, edited by Brad Haynes and Matthew Lewis)