STXNEWS LATAM-Cartica suit raises risks for Itaú-CorpBanca deal -Santander

Wed Apr 2, 2014 11:56am EDT

Tuesday's decision by U.S. investment firm Cartica Management LLC to file a lawsuit against Chile's CorpBanca SA, key shareholder Álvaro Saieh and his investment holding company over a plan to merge with Brazil's Itaú Unibanco Holding Financeira SA raises risks for the deal, analysts at Santander Investment Securities led by Boris Molina said.

In a statement, CorpBanca said Cartica's criticism of the merger "lacks basis" and vowed to defend itself.

In a client note Wednesday, Molina and his team said that, while it wasn't clear if the New York court would find merit in the lawsuit, the suit risked an "unraveling of the merger."

Molina said that if the judge considered the suit meritless, the outcome of additional action by Cartica would be awaited, which may involve lawsuits or calls for Chilean regulators to look into the issue.