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Breakingviews: World Bank vs Wall St

Wednesday, July 09, 2014 - 03:08

Rob Cox and Chris Swann discuss the D.C. lender's decision to hire an investment bank to assess Itaú Unibanco's controversial deal with CorpBanca in Chile.

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So is the World Bank taking on Wall Street that's sort of what's happening in Chile of all places. Chris want -- on the case international finance court. Which is division of the World Bank. And it's 5% of a company -- -- which is in the middle of this kind of this what we call the sweetheart deal with Banco -- with a Brazilian bank. And what's happened. Well essentially that they've had taken a very unusual step of hiring. An investment bank. -- to proved that the ailing considerable detail right now but -- I have C. It's got hired investment bank to look at the deal that's already been vetted by two investment banks -- Goldman Sachs and Bank of America. And the reason is Juan. We're living through it and deal with extremely fishy from the very stopped because of that -- -- no access everything that it hate hate to premium offered what -- -- civil -- bankers merging with the -- as they say with. -- Ito however minority shareholders get no. Uplift even though the control passes tobacco and exactly right but what's that what looks -- -- does. That is there a lot of special favors. Coal mine -- the majority main chance -- -- CIA or something like -- one of that should leave him richest man. And he gets their theories that packs that them. Content that which had fondled -- invested in the deal values that. In the region of the billion dollars that got us what those preface -- Thought well he gets a very very low interest credit line which apparently he needs -- he has problems elsewhere it's business -- -- that. He's in he owns and it's for the holding company that owns the -- yes okay. I he'll forget put option which means that today he canceled the upside from -- its stake none of the down side. And that's also -- guaranteed dividend right quite a valuable package but it's kind of funny so the World Bank has come in and said. OK great Goldman Sachs and Bank of America you've done your work you call that a fair deal. And were and not so sure so we're gonna hire someone else to basically adjudicate in whether the adjudication was yet for. When in reality Goldman Sachs and Bank of America have covered themselves at least legally if not reputation because. Right at the bit that there's a massive disclaimer attached that document explaining exactly what they didn't do what I didn't do this. Valued the company. And they didn't -- not saying that this is the best deal they -- not recommending on that -- how shelled us that was pretty -- circumscribed. That's what they were adjudicating on back in the first place so we can't that they came -- did a deal that was or or did that on fairness opinion -- they went -- to approve rifle and look at the products that we get them to sites that you're just looking at one at with the exchange ratio yet between court -- -- bacteria to right okay. It's complicated but it's that the big picture is the World Bank is jumping in hiring and investment bank to trying to figure out whether who's right who's wrong in this case that's pretty interest. Our thanks Chris we've gotten more break and he's tomorrow.

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Breakingviews: World Bank vs Wall St

Wednesday, July 09, 2014 - 03:08

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