Business Context and Reporting Period
This Form 6-K filing by Banco Bradesco S.A. (Bradesco) reports a material fact regarding a corporate transaction approved by the Central Bank of Brazil on November 9, 2009. The filing, dated October 14, 2009, details the acquisition of control and subsequent merger of Ibi Participações S.A. (Ibi Participações) into Bradesco. The transaction was scheduled to be proposed at Extraordinary Shareholders' Meetings on October 29, 2009.
Key Financial Metrics and Transaction Details
The filing focuses on the valuation and capital structure changes resulting from the merger rather than standard operating financials (revenue, profit, cash flow) for the period.
- Transaction Cost: Approximately R$2 million.
- Book Shareholders' Equity (as of July 31, 2009):
- Bradesco: R$37,956,249,170.49
- Ibi Participações: R$925,151,382.25
- Appraised Economic Value:
- Bradesco: R$91,868,160,462.79 (net of treasury shares as of October 2, 2009)
- Ibi Participações: R$1,368,183,000.00
- Capital Stock Increase: Bradesco's capital stock increased from R$23,000,000,000.00 to R$24,368,183,000.00.
- Share Issuance: 45,662,775 new shares issued to Ibi Participações shareholders (22,831,389 common; 22,831,386 preferred).
- Exchange Ratio: 0.049401676 fraction of a Bradesco share for each Ibi Participações share.
Material Changes Versus Prior Period
The primary material change is the structural consolidation of Ibi Participações into Bradesco. This operation enables Bradesco to directly assume control of Ibi Participações and indirectly control its subsidiaries, including Banco Ibi S.A. and Ibi Corretora de Seguros Ltda. The filing does not provide comparative revenue or profit data for the period ending December 31, 2009, as the document is a transaction announcement rather than a periodic financial report.
Guidance, Outlook, and Risks
Management Commentary: The merger is intended to achieve higher levels of competitiveness and productivity by absorbing expertise in a segment attractive to banking activities and enhancing synergies between the institutions.
Risks and Contingencies:
- The operation is subject to approval by the Central Bank of Brazil.
- Shareholders of both companies have the right to withdraw (dissenters' rights) based on book value as of July 31, 2009.
- Forward-looking statements regarding future performance are subject to risks including general economic conditions, industry conditions, and operating factors.
Key Facts for Investor Verification
- Verify the final approval status of the merger by the Central Bank of Brazil and the completion date of the share exchange.
- Confirm the exact number of new shares issued and the updated total share count of Bradesco post-merger.
- Review the impact of the R$1.368 billion capital increase on Bradesco's earnings per share (EPS) and book value per share.
- Assess the integration progress of Banco Ibi S.A. and other Ibi subsidiaries into Bradesco's operations.
- Monitor any regulatory changes affecting the insurance and brokerage segments acquired through Ibi Participações.