Grupo BTG Pactual, the Brazilian investment bank founded by billionaire Andre Esteves, is working on a bid for JPMorgan’s physical commodities business, said a person with direct knowledge of the matter.
Bloomberg reports that BTG is in the early stages of reviewing the financial information, said the person, who requested anonymity because the process is private and didn’t specify how big the offer will be.
JPMorgan has sought $3.3bn for the division and the first round of bids is due before the end of the month, a person with direct knowledge of the sale process said last week. The bank probably would prefer to divest the entire unit, making it harder for other firms seeking to expand existing commodities businesses by bidding on the pieces, said Gerard Cassidy, an RBC Capital Markets analyst.
'Selling the division in total would generate the best price as different parts of the business can leverage off one another, creating incremental value that would be lost by selling it in pieces', Cassidy said yesterday in an e-mail.
Documents circulated by JPMorgan say the unit produces $750m in annual income before compensation costs, according to the person with knowledge of the sale process. Possible bidders were granted access to some information about the business, the person said.
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