UPDATE 2-Brazil's Itaú buys BTG Pactual's debt collector stake, trumps rival bid
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By Guillermo Parra-Bernal and Tatiana Bautzer
SAO PAULO Dec 31 (Reuters) - Itaú Unibanco Holding SA, Brazil's No. 1 bank by market value, has agreed to pay Grupo BTG Pactual SA about 1.21 billion reais ($305 million) for a stake in a debt collection company and a pool of non-performing loans, in a last-minute bid that trumped a rival bid.
In a Thursday securities filing, Itaú said that it would pay 640 million reais for the 82 percent stake that BTG Pactual owned in Recovery do Brasil SA once the deal wins regulatory approval. Itaú also clinched the purchase of 70 percent of a 38 billion-real portfolio of bad loans managed by BTG Pactual for 570 million reais, in cash, the filing added.
BTG Pactual is rushing to sell assets to shore up cash holdings and restore client confidence in the wake of the arrest of founder André Esteves. BTG Pactual expected to fetch between 400 million reais and 1.2 billion reais from exiting Recovery, Latin America's biggest debt collector, sources said earlier this month.
The Recovery transaction was announced after an intense sale process that lasted about three weeks, two sources with direct knowledge of the deal said. Itaú placed a bid once exclusive talks between distressed asset firm Lone Star Funds and BTG Pactual expired on Monday, the first source said, asking for anonymity as terms of the deal remain confidential.
Reuters reported on Dec. 17 that Lone Star had started exclusive talks for the Recovery stake. The offer presented by Itaú, which advised Lone Star until exclusive talks ended, was 20 percent bigger than Lone Star's, the sources added.
Itaú did not have an immediate comment. Messages left for a Lone Star media executive in New York were not immediately returned. BTG Pactual declined to comment.