UPDATE 4-Unnamed BTG Pactual holder sells stake; JC Flowers suspected

Fri Jan 11, 2013 10:27am EST

* Deal raises 232.7 million reais, 21 percent more than planned

* Bradesco BBI analysts say likely seller was JC Flowers

* Shares rally 3.3 percent, erasing some of Thursday losses

By Guillermo Parra-Bernal

SAO PAULO, Jan 11 (Reuters) - An unnamed BTG Pactual Group shareholder sold a stake in Brazil's largest independent investment bank above the minimum asked price at an auction on Friday, signaling that buyers are confident of the company's future performance.

The seller raised 232.7 million reais ($114 million) in the auction, 21 percent more than initially planned.

The seller, who was neither a member of BTG Pactual's controlling bloc nor part of the bank's management, sold 7.19 million units for 32.36 reais each, the São Paulo Stock Exchange said in a statement. The offering was for at least 6.53 million shares at a minimum ask price of 29.50 reais.

Bradesco BBI analysts led by Carlos Firetti said the seller was JC Flowers & Co. The U.S. buyout firm sold 40 percent of its stake in BTG Pactual, partially cashing out of a two-year investment that yielded an estimated 60 percent return, the analysts said.

New York-based JC Flowers is a private equity firm led by former Goldman Sachs Group Inc star dealmaker Christopher Flowers.

Units, a blend of common and preferred stock of BTG Pactual's investment banking and private equity divisions, rallied 3.3 percent to 32.54 reais on Friday, the day after news of the block sale triggered a 4.3 percent drop, their steepest decline in almost eight months.

Since founding the firm in 2001, Flowers and his partners have made money by partially or fully exiting some of their investments through initial public offerings or strategic stake sales, like they did with Japan's Shinsei Bank Ltd in 2004. The Japanese bank's IPO, which rival tycoon David Rubenstein dubbed the most successful private equity deal in history, reportedly netted JC Flowers more than $1 billion in profits.

JC Flowers had made public its intention to exit its stake, which comprises about 1.8 percent of the Brazilian bank's capital. The stake, which the buyout firm acquired for $180 million in December 2010, is valued at about $270 million.

Before BTG Pactual's $2 billion IPO in April 2011, Chief Executive André Esteves sold a 10 percent stake in BTG in December 2010 to sovereign wealth funds and a pool of investors, including JC Flowers and Italy's Agnelli, Colombia's Santo Domingo and Panama's Mota families.

A London-based public relations executive representing JC Flowers would not confirm that the buyout firm had sold part of its stake in BTG Pactual on Friday.

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