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Citi takes offer for 40.2% of Habitat from construction chamber

Bnamericas
Citi (NYSE: C) has accepted the offer by Chile's construction chamber (CChC) to buy its 40.2% stake in the country's second largest pension fund manager AFP Habitat. The pricetag for the deal came in at around US$244mn. CChC - which already owns 40.2% of Habitat - last month launched a tender offer with the aim of taking full control of the company. Invesco, CChC's investment vehicle, offered to buy 1bn shares in Habitat at 315 pesos per share. According to William Baeza, analyst at Chilean financial group EuroAmérica, the tender offer was merely a formality as its success depended on Citi's acceptance, which was already secured. However, minority shareholders have until April 21 to decide whether to sell or keep their shares. In documents sent to the local regulator last week, four Habitat board members advised minority shareholders to sell their stock on grounds that the stock's liquidity will probably decrease if the tender offer is successful. On the other hand, five board members advised shareholders against selling, as the price offered is lower than AFP Habitat's current stock price. On Wednesday (Apr 7), the stock closed at 355 pesos. Baeza agrees with this argument, and added that the board members' concerns about the future liquidity of the stock are debatable. In her letter sent to the regulator last week, board member María Teresa Infante pointed out that Habitat's stock already has very little presence and scarce liquidity in the Santiago stock exchange. In addition, Habitat's share price offers potential upside, as it trades at a discount compared to its peers, which Baeza thinks is unjustified. AFP Habitat has US$29bn in assets under management and a 24% market share in terms of affiliates.

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