January 31, 2011 / 1:03 PM / 9 years ago

UPDATE 2-BTG, Santos close in on PanAmericano deal-source

* Controlling shareholder, BTG at odds over price

* Stalemate should be resolved in “a day or two”

* Central bank wants Santos out of lender, Valor reports

* Shares jump 7 percent on speculation of a sale (Adds share performance, Bradesco in paragraphs 5, 15)

By Guillermo Parra-Bernal

SAO PAULO, Jan 31 (Reuters) - Brazilian media tycoon Silvio Santos is at odds with securities firm BTG Pactual over price in talks to sell his stake in Banco PanAmericano BPNM4.SA, but a deal is expected within “in a day or two,” a source with knowledge of the situation told Reuters on Monday.

Santos, who owns about 37 percent of PanAmericano’s capital, and the deposit insurance fund known as FGC — which lent the funds for PanAmericano’s emergency rescue in November — are “all right” with most terms offered by BTG, said the source, who requested anonymity because the talks are private.

In November, Santos borrowed 2.5 billion reais ($1.5 billion) from the FGC to bolster PanAmericano’s balance sheet after accounting problems were found. Santos got the money from the fund using assets owned by his investment holding company Grupo Silvio Santos as a collateral.

A formal announcement was expected on Sunday, a source told Reuters on Saturday. [ID:nN29116028] The central bank wants Santos out of PanAmericano’s controlling bloc and demanded a quick resolution to the impasse, newspaper Valor Economico said on Monday, without saying how it obtained the information.

Nonvoting shares of PanAmericano surged 7.1 percent on Monday to 4.70 reais on speculation the sale will be sealed. The stock is up about 8 percent this year despite last week’s 12 percent slump after media reports said that more losses related to flawed provisioning for bad loans were found.

The source did not elaborate on the value under discussion and other terms of the transaction.

But some analysts were skeptical that the bank is ready to change owners in the short term.

Uncertainty over corporate governance and price issues and the fact that a new buyer requires the approval of state-run Caixa Economica Federal — which owns about 36 percent of PanAmericano — makes a sale unlikely at this moment, said Frederic de Mariz, an analyst with JPMorgan Chase & Co.

“For those reasons, we think a sale of PanAmericano to another bank is unlikely in the short term,” de Mariz wrote in a report.

PanAmericano held talks most of last week with rivals over a possible sale as concerns mounted that growing losses could lead to another rescue. BTG, the firm controlled by Brazilian financier Andre Esteves, recently obtained a fresh capital injection that valued its business at $10 billion. [ID:nN06221694]

ACCOUNTING PROBLEMS

PanAmericano had to postpone the release of earnings data for the prior two quarters and all of 2010 because of the stalemate in negotiations, O Estado de S.Paulo reported on Monday. Estado and Valor said losses stemming from flawed booking practices rose to 4 billion reais ($2.4 billion) from an initial estimate of 2.5 billion reais in November.

The talks come as some industry specialists are challenging the role of the central bank in the process, saying officials failed to assess PanAmericano’s total losses with accuracy and foresee woes involving rapid growth in consumer lending.

BTG has pledged to buy PanAmericano’s receivables such as loan portfolios and other assets, and provide the lender with additional liquidity if a sale takes place, Valor said.

That move could ease fears of a liquidity dearth among banks in Latin America’s largest economy. Brazil’s three biggest banks — state-run Banco do Brasil (BBAS3.SA), and non-government lenders Itau Unibanco (ITUB4.SA) and Banco Bradesco (BBDC4.SA) — are among PanAmericano’s largest creditors.

Bradesco has bought loans from PanAmericano before but never held talks or had an interest in acquiring a stake in the troubled lender, CEO Luiz Carlos Trabuco Cappi told reporters on a conference call on Monday.

The three giants are also the FGC’s biggest contributors. Unlike in many other countries, Brazil’s deposit guarantee fund is owned by banks and not funded with public money.

Spokespeople at BTG Pactual could not be reached when contacted by Reuters for comment. PanAmericano and Grupo Silvio Santos declined to comment.

($1=1.675 reais)

Editing by Dave Zimmerman

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