SHARES of Itau Unibanco, Brazil’s largest private-sector bank, appeared headed for their biggest one-day drop in almost a year yesterday on concern that a massive offering of its stock owned by Bank of America will pressure prices in the days ahead.
Bank of America agreed to sell its 188.42m preferred shares of the Brazilian bank in a secondary offering and will also sell 56.48m common shares of Itau Unibanco to its parent, Itausa. The secondary offering would be equivalent to 8.4 per cent of all outstanding preferred shares.
The offering pressures Itau Unibanco shares because of the sheer size, Ativa brokerage said.
The sale would amount to nearly $4.5bn (£3.1bn) at Tuesday’s closing price for the Itau Unibanco shares.
The preferred stock tumbled as much as 6.8 per cent to 32.6 reais yesterday. The stock’s biggest one-day plunge was 7.6 per cent on 7 May, 2009.