SAO PAULO, Dec 15 (Reuters) - U.S. investment firm Cartica Management LLC will drop further legal action challenging a merger between Brazil’s Itaú Unibanco Holding SA and Chile’s CorpBanca SA after efforts to block the deal were dismissed in Chilean and American courts, a senior executive said on Monday.
Cartica will drop a plan to appeal a September ruling by a court in the Southern District of New York dismissing a complaint over poor disclosure of terms in the Itaú-CorpBanca deal, said Mike Lubrano, a managing director at the Washington D.C.-based firm.
Cartica had argued since March that CorpBanca controlling shareholder Alvaro Saieh and Itaú negotiated “inequitable special benefits” for the billionaire financier and his CorpGroup holding company. Cartica will continue to oppose those benefits and press Itaú to remove some of them, Lubrano said.
“We will focus on the post-merger corporate governance arrangement,” Lubrano said in a phone interview. “We are ceasing any legal action” against the merger, he added.
Cartica’s decision came just a few days after the International Finance Corp, the World Bank’s investment banking arm known as the IFC, agreed to endorse the Itaú-CorpBanca merger, giving a huge boost to the largest Latin American banking tie-up since 2008.
Like Cartica, the IFC was a key shareholder in Santiago-based CorpBanca.
Itaú shares fell 3 percent to 32.72 reais on Monday, while CorpBanca dropped 3.2 percent to 7.109 Chilean pesos. (Reporting by Guillermo Parra-Bernal; editing by Matthew Lewis)