July 17, 2017 / 5:36 AM / in 6 months

EFG, BTG Pactual settle on final BSI price at $1 billion

ZURICH (Reuters) - Switzerland’s EFG International (EFGN.S) and Brazil’s BTG Pactual (BPAC3.SA) have struck a deal on the final price for BSI Bank at just under 1 billion Swiss francs ($1.04 billion), after billions in outflows at BSI had pushed down the value of the transaction.

EFG’s acquisition of Swiss rival BSI from BTG Pactual last year helped make it one of Switzerland’s 10 biggest private banks behind the likes of UBS (UBSG.S), Credit Suisse (CSGN.S) and Julius Baer (BAER.S).

However, the deal has been complicated by BSI’s legal troubles which included dealings linked to scandal-hit Malaysian government fund 1Malaysia Development Bhd (1MDB) and resulted in significant client withdrawals.

Its original price estimate was for 1.3 billion francs when the transaction was announced in February 2016. Due to the outflows, this eventually came down in March this year to 783.9 million francs, a figure EFG had said it expected BTG to dispute.

EFG said on Monday the pair had now agreed a final price of 971 million Swiss francs in a mixture of cash, EFG shares and hybrid capital.

    The agreement means BTG will pay EFG 89 million francs, EFG said, adding it expects the deal to reduce its current capital ratios by around 1 percentage point.

    Shares in EFG, which reports first-half results on July 26, were up 0.8 percent at 0943 GMT.

    Reporting by John Miller and Joshua Franklin; editing by Susan Thomas

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