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Report: Said families to secure a 24.2% stake in Scotiabank Chile

Chile's Said Somavía and Said Handal families have opted to secure a 24.2% stake in Scotiabank Chile following its merger with Banco Bilbao Vizcaya Argentaria Chile SA, La Tercera reported citing unnamed sources "familiar with the matter."

The Said families, which together owned 31.62% in BBVA Chile prior to Scotiabank's acquisition, signed an agreement with Bank of Nova Scotia, under which it will be left with a stake of between 24.1% and 25% of the merged entity and will have control of four board seats, including the chairman position.

José Said Saffie will reportedly become chairman at the new bank, while his relatives Salvador Said Somavía, Jaime Said Handal and Gonzalo Said Handal will join the board as directors.

According to the publication, the families will invest around $500 million to the merged bank, which will go by the transition name Scotiabank Azul.

The Saids will, according to the sources, take loans at two banks to finance around half of the amount, with shares as guarantees while the other $250 million will come from the sale of the stake in insurer Bupa Chile SA, formerly Cruz Blanca, which the Said Somavía family sold in 2016.

On Aug. 2 an extraordinary shareholders meeting at Scotiabank will discuss details of the merger, where the bank is proposing an exchange ratio of about 13.55 shares for each BBVA Chile share, according to previous regulatory filings.

The bank is also proposing a capital increase of 324.34 billion Chilean pesos through the issuance of around 5.61 billion new ordinary shares, which will reportedly formally set the stake of the Said families.

The shareholders of BBVA Chile on the same day, meanwhile, will discuss a dividend payment of 111.39 billion pesos, paid with retained earnings.

Scotiabank previously said it plans to legally complete the merger Sept. 1, subject to regulatory approvals, while the overall integration will take longer.

As of July 27, US$1 was equivalent to 642.89 Chilean pesos.