Business Context and Reporting Period
This Form 6-K filing by Banco Bradesco S.A. (Bradesco) covers the month of May 2003. The document details a material fact regarding the acquisition of control of Banco Bilbao Vizcaya Argentaria Brasil S.A. (BBV Banco). On May 21, 2003, the Brazilian Central Bank approved the transfer of share control of BBV Banco to Bradesco, converting BBV Banco into a wholly-owned subsidiary.
Key Financial Metrics and Transaction Details
- Transaction Cost: Approximately R$6 million.
- Acquisition of BBVA Holdings: Bradesco acquired 4,631,991,278 stocks held by Banco Bilbao Vizcaya Argentaria, S.A. (BBVA) for R$1,849,970,549.00. This represents 49% of BBV Banco's common capital and 99.99% of its preferred capital.
- Capital Increase: Bradesco will increase its capital by R$630,000,000.00 through the issuance of 70,431,409,114 new stocks to BBV Banco stockholders.
- Book Value of Equity (as of March 31, 2003):
- BBV Banco: R$2,584,692,686.24
- Bradesco: R$11,707,743,139.86
- Share Substitution Ratio: For each BBV Banco stock, 44.422475667 Bradesco stocks will be attributed (22.379315072 common and 22.043160595 preferred).
- Valuation Basis: The R$630 million attributed to BBV Banco stocks subject to transfer equates to R$0.397353397 per stock based on economic value. The new Bradesco stocks are valued at R$8.944872862 per thousand stocks (market value from December 2002), representing 1.157822618 times the book value as of March 31, 2003.
Material Changes and Operational Impact
The primary material change is the structural integration of BBV Banco into Bradesco. The operation aims to enhance competitiveness and productivity through synergies in a globalized financial sector. BBV Banco will undergo corporate restructuring, including the conversion of preferred stocks to common stocks, elimination of authorized capital, and modifications to its Board of Directors and Executive Officers. BBVA will retain the right to elect one member to Bradesco's Board of Directors via a Stockholders' Agreement.
Guidance, Outlook, and Risks
Timeline: Special Stockholders' Meetings to propose the absorption are scheduled for June 9, 2003. The operation is set to take place on June 9, 2003, pending final approvals.
Dividend Rights: New Bradesco stocks attributed to BBV Banco stockholders will be fully entitled to dividends and interest on own capital declared from the month of Central Bank approval.
Risks and Contingencies: The filing includes standard forward-looking statements warning that actual results may differ due to economic conditions, industry trends, and operating factors. The transaction is subject to approval by the Brazilian Central Bank and compliance with Law 6404/76. Stockholders have the right to withdraw from the companies based on specific book value reimbursements.
Investor Verification Checklist
- Confirm the final approval of the absorption by the Special Stockholders' Meetings on June 9, 2003.
- Verify the final execution of the Stockholders' Agreement granting BBVA a seat on Bradesco's Board.
- Monitor the integration of BBV Banco's balance sheet into Bradesco's consolidated financials post-closing.
- Review the impact of the R$630 million capital increase on Bradesco's earnings per share and capital adequacy ratios.
- Check for any regulatory changes or delays from the Brazilian Central Bank affecting the June 9, 2003 closing date.