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By Guillermo Parra-Bernal
SAO PAULO, June 26 Itaú BBA's heavily
oversubscribed underwriting deal in Mexico demonstrates the
growing ability of the Brazilian investment bank to compete with
deep-pocketed rivals and to win business outside its home base.
Bankers at Itaú BBA were responsible for the international
portion of Mexican restaurant operator Alsea SAB de CV's
$500 million follow-on offering, which was completed
Tuesday. Fifty-two percent of the proceeds came from investors
outside Mexico that Itaú helped bring in for the deal.
U.S. investors snapped up 50 percent of the Itaú BBA-handled
offering, with Brazilians and Chileans taking one-third, Facundo
Vázquez, Itaú BBA's head of Latin America equity capital
markets, said in an interview. The rest was purchased by
investors in Europe and Asia.
Itaú BBA is also growing in Chile, Colombia and Peru as
capital markets activity in Brazil appears headed for its
weakest year in at least a decade. Analysts expect Itaú BBA's
investment-banking deals to increase further once it wins
regulatory approval to open a broker-dealer in Mexico.
"In all my experience in Latin America, I had never seen
such massive interest in a Mexican deal by Brazilian and Chilean
investors," Vázquez said.
For two years, Itaú BBA nurtured its relationship with Alsea
by initiating research coverage and hiring dealmakers close to
the company. Both factors helped Itaú BBA be placed as a
bookrunner for the offering alongside HSBC Holdings Plc
, Citigroup Inc and Banco Bilbao Vizcaya
Argentaria SA, which had lent Alsea money for an
Demand for the overseas portion of the offering topped about
$1.5 billion, while only about $260 million was available.
Alsea, which runs Starbucks coffee shops and Domino's
Pizza and Burger King restaurants in Mexico,
Argentina, Chile and Colombia, sold the shares at 45.75 Mexican
pesos each, only 0.8 percent off its Tuesday closing price.
Parent lender Itaú Unibanco Holding SA is
expanding in Latin America to help Itaú BBA's Brazilian clients
seek new destinations for their money and boost credit and
specialized financial services for companies in the region. A
pullback from major global lenders from the region is helping
Itaú BBA in its push.
To grow in Latin America, Itaú BBA and rival Brazilian banks
are spending heavily to groom new talent, enhance client
relations abroad and beef up their ability to place new issues
to markets. Grupo BTG Pactual SA is also pushing
into Mexico, Colombia and Chile.
BTG Pactual is atop Latin America equity underwriting
rankings after advising on seven deals this year, and Itaú BBA
ranked sixth after working on three, Thomson Reuters data
Itaú BBA expects to have 50 employees in Mexico once its
broker-dealer is approved. Last year, it hired Mexico's first
national housing czar, Alberto Mulas, to lead the unit.
(Editing by Todd Benson and Lisa Von Ahn)