Bloomberg News

Colombia’s Helm Bank Soars on Takeover Speculation: Bogota Mover

April 09, 2012

Helm Bank SA (PFBHELM) rose the most on record in Bogota trading on speculation the Colombian lender will be acquired.

The bank will announce this week that it has agreed to be bought, El Tiempo newspaper reported, citing people it didn’t identify. The shares soared 16 percent to 460 pesos, the biggest gain since the stock started trading in December 2007.

Helm has jumped 50 percent this year, outpacing the 18 percent gain in the benchmark IGBC Index of stocks, as investors bet it will be targeted following an unprecedented surge in acquisitions of Andean financial firms and an increase in credit in Colombia, said Juliana Valencia, a stocks analyst at Alianza Valores brokerage in Bogota.

“Recently we’ve seen a lot of appetite for Colombian banks, not only given the economy’s expansion but also the growth in lending,” Valencia said.

Helm President Carmina Ferro didn’t return a phone call from Bloomberg News seeking comment. In a February interview, Ferro said controlling stakeholders have no intention of selling.

“The market has reacted strongly to the rumors,” Cesar Cuervo, an analyst at brokerage Correval SA in Bogota wrote in a report to clients.

Acquisitions of Andean financial firms worth a record $7.56 billion were announced last year, five times the previous year’s total, while similar transactions in North America slumped 8.9 percent, according to data compiled by Bloomberg.

Credit Expansion

Credit expansion of 22 percent helped power the economy’s 5.9 percent growth last year, the fastest pace since gross domestic product rose 6.9 percent in 2007.

Itau Unibanco Holding SA (ITUB4), Latin America’s biggest bank by market value, Banco do Brasil SA (BBAS3) and Bank of Nova Scotia (BNS) are among bidders for Helm, according to El Tiempo.

An official from Banco do Brasil, who asked not to be identified because of company policy, declined to comment. An official from Itau didn’t immediately return calls seeking comment and Andrew Chornenky, a spokesman for Scotiabank, didn’t immediately answer a phone call and e-mail.

Corpbanca of Chile agreed in December to pay $1.16 billion for 95 percent of Banco Santander Colombia SA (SANTAN). Scotiabank bought Colombia’s Colpatria for $1 billion in October while Brazil’s Banco BTG Pactual SA agreed Feb. 8 to buy Chile’s Celfin Capital SA for $245 million in cash plus additional shares. Banco de Credito del Peru, the country’s biggest bank, agreed to buy 51 percent of Chile’s Correval in a deal announced Dec. 1.

“Helm is a medium-sized bank, quite strong in the corporate and business lending segments,” said David Pelaez, an analyst at Bolsa y Renta brokerage in Medellin. “It’s interesting for a foreign bank as it would automatically gain a significant market share of approximately 4.2 percent.”

To contact the reporters on this story: Andrea Jaramillo in Bogota at ajaramillo1@bloomberg.net; Eduardo Thomson in Santiago at ethomson1@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net


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