The Brazilian government offered its stake in IRB-Brasil Resseguros SA to Banco Bradesco SA and Itaú Unibanco Holding SA, Valor Econômico reported citing two sources.
Economy Minister Paulo Guedes and the banks' presidents, Octavio de Lazari Jr. and Candido Botelho Bracher, reportedly discussed the matter in a meeting May 24. Although the banks' officials said they would analyze the possible stake purchase, both have little interest in exercising preemptive rights, according to the sources.
The government will most likely launch a public offering for its shares, although it is not yet known if the government's withdrawal from IRB-Brasil will happen in the same operation as that of Banco do Brasil SA's planned stake sale.
However, a stock exchange listing for the government's stake may require some legal teaks, so as to allow the reinsurer to only have "relevant shareholders," as opposed to controlling shareholders. Brazilian laws require insurers and reinsurers to have defined control, and Banco do Brasil and the government's exit from IRB-Brasil would leave the reinsurer without such a clear ownership, Valor said.
Banco Bradesco holds a 15.31% stake in IRB-Brasil while Itaú, through Itaú Unibanco Participacões SA, has an 11.20% stake, according to data from S&P Global Market Intelligence. The Brazilian government holds 11.74% of the reinsurer's stake and a golden share, while Banco do Brasil owns 15.31%.
Meanwhile, Banco do Brasil is preparing for its planned sale and has scheduled the operation until the second half of July, Valor said.