UPDATE 3-Cartica sues CorpBanca, Saieh in U.S. over Itaú merger
(Adds CorpBanca comments in paragraphs 3-6)
SAO PAULO, April 1 (Reuters) - U.S. investment firm Cartica Management LLC filed a lawsuit in New York on Tuesday against Chilean bank CorpBanca SA, its controlling shareholder, Álvaro Saieh, and his investment holding company over a plan to merge with Brazil's Itaú Unibanco Holding Financeira SA.
Cartica asked a court in the Southern District of New York to declare the defendants "in violation of anti-fraud provisions and disclosure requirements of the U.S. Securities Exchange Act of 1934, and to enjoin the closing of the Banco Itaú Chile-CorpBanca combination," according to a statement.
Washington, D.C.-based Cartica, which oversees about $2 billion in assets, owns about 3.2 percent of CorpBanca's common shares through separate investment vehicles. In a statement, CorpBanca Chief Executive Officer Fernando Massú said Cartica's criticism of the merger "lacks basis" and will "defend our point of view in the right place."
The fund alleges the deal with Itaú, Latin America's biggest bank by market value, undervalued CorpBanca's shares and gave special benefits to Saieh, a Chilean billionaire, and his company CorpGroup.
Cartica's move, a rare instance of investor activism in the region, threatens to upset Latin America's largest banking merger since 2008 and further underlines the difficulties facing the deal. Recent pledges by Massú to disclose more information on the merger did little to appease Cartica.
"This attempt to rob minority shareholders has gone on long enough," Teresa Barger, Cartica's managing director, said in the statement. "We have brought the fraudulent acts of Álvaro Saieh, CorpGroup and CorpBanca before a federal court because they, along with Itaú, have so far failed to take advantage of the opportunity to voluntarily call off this disastrous deal."
According to Massú, Cartica's goal is to prevent a shareholders' meeting on the deal from taking place. The executive also said that the fund's tactics, which include ignoring the jurisdiction of Chilean courts over the deal, hampers the merger and the bank and shareholders as a whole.
CorpBanca shares gained 1.4 percent to close at 6.54 Chilean pesos in Santiago. The shares are up about 7 percent since Jan. 29, when the deal was announced. The preferred shares of Itaú were up 0.8 percent. Continuación...