(Adds share price in offering and context)
By Carolina Mandl
SAO PAULO, April 10 (Reuters) - Brazilian financial group BTG Pactual Holding SA has launched a tender offer to delist its investments unit PPLA Participations Ltd from the country’s stock exchange B3 SA Brasil Bolsa Balcao, according to a filing on Wednesday.
If the process is successful, the holding will keep listed only its bank Banco BTG Pactual SA, which encompasses the group’s investment banking and money management activities. PPLA Participations holds investments made with the group’s own capital, such as private equity and property.
BTG Pactual Holding is offering PPLA’s shareholders 1.19 real per Brazilian Depositary Receipt unit, which comprises three PPLA shares. Units in PPLA were trading at 2.40 reais in morning trading.
To acquire all units in the free float, BTG would spend 22 million reais ($5.7 million) in the offering.
BTG Pactual group has been trying to segregate its two divisions for the last two years, betting on enhanced transparency and more profitable businesses to regain investor trust. Costs related to keeping a company listed are also among the reasons to delist PPLA, one source added.
The first move with that goal was the segregation of PPLA in 2017. Many of PPLA investments ended up being money-losing, such as drugstore chain BR Pharma, retailer Lojas Leader, mining company B&A and some loans.
PPLA posted a net loss of 163 million reais in 2018, while its shareholders equity was at 3.8 million reais in December.
The auction to buy PPLA units will occur on May 10.
Contrary to PPLA, units in Banco BTG Pactual SA are up nearly 65 percent this year, trading at 37.84 reais, as the bank has been gaining steam since its founder Andre Esteves was acquitted in July after being accused of involvement in a bribery scheme.
BTG is spending heavily to expand its online brokerage, known as BTG Pactual Digital, to capture investors to its investment products, as well as third party ones.
$1 = 3.8401 reais Reporting by Carolina Mandl; Editing by Christian Plumb and David Gregorio