Brazil's reinsurer IRB prepares $650 mln follow-on within weeks -sources

SAO PAULO, Feb 6 (Reuters) - Shareholders in Brazil’s reinsurer IRB Brasil Resseguros SA is preparing a secondary share offering involving at least 9 percent of its capital within weeks, three sources with knowledge of the matter said on Wednesday.

State-run bank Caixa Economica Federal is expected to sell an 8.9 percent stake in IRB, worth around 2.4 billion reais ($648.4 million), owned by a Brazil’s government fund responsible for financing student loans.

Other shareholders, however, still may join, increasing the offering size. State-controlled lender Banco do Brasil SA , for instance, is also considering the sale of some shares, but has not decided yet if it will join Caixa in this offering.

Although the government owns a larger stake in IRB, Caixa decided to sell first the 8.9 percent stake owned by the fund because the approval of the sale is easier than for stakes held by other government entities, one of the sources said.

According to one of the sources, the offering may happen within weeks. IRB reports fourth-quarter earnings on Thursday.

Caixa Economica Federal, manager of the fund, Banco do Brasil SA and the investment banking units of Banco Bradesco SA, Itaú Unibanco Holding SA and Bank of America Corp will manage the offering, the sources added.

Caixa, Banco do Brasil, Bradesco, Itaú and BofA declined comment.

Earlier on Wednesday, newspaper O Estado de S. Paulo reported the hiring of the banks for the offering.

Caixa’s Chief Executive Officer Pedro Guimaraes said last week the bank wants to accelerate initial public offerings of its subsidiaries and sell all stakes held by Caixa in publicly listed companies. ($1 = 3.7014 reais) (Reporting by Tatiana Bautzer and Carolina Mandl; editing by Grant McCool)