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Brazil’s XP chooses a road often travelled: selling to Itaú

Itaú buys XP to protect its market share; staggered deal offers XP a certain future away from IPO risks.

Brazilian brokerage firm XP Holding Investimentos has pulled its IPO in favour of selling a large minority stake to Itaú.

Candido_Bracher-160x186

Cândido Bracher,
Itaú

The announcement came just days after XP had filed for an IPO that was expected to raise between $1.5 billion and $2 billion.

The São Paulo-based brokerage had hired JPMorgan, Banco do Brasil, Bank of America Merrill Lynch, Bradesco, BTG Pactual, Goldman Sachs, Morgan Stanley and Safra to lead the primary equity offering.

Speaking to Euromoney in New York, one of the bankers working on the deal says its cancellation was a loss to the nascent recovery in the Brazilian equity markets.

“It was going to be a good story in the development of the Brazilian equity market,” he says. “Investors were very interested and this deal ticked a lot of the boxes for the type of company that they are looking for.

“Also, had XP been successful – which I am confident that it would have been – it would have helped others come to market.