QIA to Sell 40% Stake in Santander Brazil Bank

March 28, 2017

Qatar Investment Authority (QIA) has put as many as 80 million units of Banco Santander Brazil SA up for sale, liquidating 40 percent of its position after shares more than doubled over the past year.

In a Tuesday securities filing, Santander Brazil, the No. 3 private-sector bank, said the offering of units will be underwritten by its investment banking unit as well as Bank of America Corp and Credit Suisse Group AG.

Santander Brazil units correspond to a blend of one common and one preferred share in the bank, a division of Spain's Banco Santander SA.

At Monday's closing price, the offering could raise as much as QR 2.8 billion ($896 million) for QIA, an investment firm controlled by the Gulf state's government, if it chooses to exercise an additional allotment of 12 million units. QIA, which Santander Brazil identified in its securities filing by its previous name of Qatar Holdings LLC, said it expects to remain the second largest shareholder of Santander Brazil after the sale.

In an emailed statement, QIA said it intends to sell approximately 40 percent of its 5.5 percent stake in Santander Brazil. QIA has been an investor in Santander Brazil for nearly seven years.

The sale, known as a public offering with restricted efforts, differs from standard equity offerings in that QIA does not have to request registration of the plan with securities industry watchdog CVM. Only qualified investors can participate, and the deals cannot be marketed through road shows or the media.

The offering follows a 95 percent increase in the price of Santander Brasil units in 2016, a rally that has puzzled many investors.

The units fell 6.1 percent on Tuesday, leading losses on Brazil's benchmark Bovespa stock index and nearly erasing this year's gains.

An index tracking shares of banks and financial companies on the S'e3o Paulo Stock Exchange advanced 12.4 percent in the period.