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UPDATE 1-Chile's CorpBanca confirms merger bids, control issue looms

Thursday, 12 Dec 2013 | 8:41 AM ET

SANTIAGO, Dec 12 (Reuters) - Chilean bank CorpBanca confirmed it had received merger offers but said it would only accept a bid that allows billionaire businessman Alvaro Saieh to retain some control in the bank.

Saieh owns about a 55 percent controlling stake in CorpBanca, Chile's fifth-largest and oldest bank, which also has operations in Colombia.

CorpBanca did not disclose the names of the bidders but said in a statement to securities regulator on Thursday that it was analyzing offers from "recognized banking operators" and that no agreement had yet been reached.

"Whichever one is implemented, the Saieh group will maintain a relevant shareholding and management control," it said.

Last week, Reuters reported that Brazil's Itau Unibanco Holding SA and Spain's Banco Bilbao Vizcaya Argentaria were the frontrunners in the pursuit of CorpBanca.

On Wednesday, Itau confirmed it was in talks with the Chilean bank, but the head of Itau's investment banking unit said that it had no interest in a minority stake.

BBVA, like CorpBanca, has significant operations in Colombia. A tie-up between the two would create Colombia's No. 2 lender, which could be the key selling point for a deal, analysts have said.

Canada's Scotiabank and Chinese banks have also shown interest in CorpBanca, according to local media reports.

A source close to CorpBanca's merger negotiations said on Thursday that the process had been "dynamic" and that preference for one bidder or another could change from day to day.

CorpBanca told Reuters this week that there was no hurry and no deadline as the bank wanted to clinch the best deal it could,

Colombia-born Saieh is seeking to raise cash for parent group CorpGroup after an accounting error led its retail business, SMU, which runs one of Chile's biggest supermarkets, to breach debt covenants earlier this year.

Concerns over SMU's problems led CorpBanca's shares to an all-time low in August. They have since recovered, boosted partly by news of the merger talks, and were flat at 7,100 Chilean pesos on Thursday, valuing the company at around 2.4 trillion Chilean pesos ($4.5 billion).