Itausa Sells Stake in XP, Now Holds 11.51% in Total Capital

Itausa SA, a Brazilian investment firm, announced on Wednesday that it had sold 12 million class A shares in XP Inc for about 1.8 billion Brazilian real ($366.58 million). Reuters reports that the company holds 11.51% of the brokerage’s total capital.

XP was sold as part of Itausa’s strategy to lower its stake and raise additional capital during 2022, as CEO Alfredo Setubal said last month that the company would continue selling shares.

Itausa reiterated its strategy on Wednesday, saying that it still expects to sell 24 million shares of XP this year as it sees it as a non-strategic asset. Following its recent investments, the holding company noted it is in need of rebuilding its cash position.

According to Itausa, the deal is expected to have a positive impact of about 1.1 billion Brazilian real on earnings in the first quarter of this year, at least that is what it stated in a securities filing.

XP Inc IPO's Plans Background

In 2019, XP Inc., Brazil’s largest stockbroker, was expected to raise between $1.5 billion and $2.1 billion on Nasdaq in what could be the biggest initial public offering for a Brazilian company.

The company planned to price its public offering at around the midpoint of its expected price range. XP had set a range last month of $22 and $25 per share, and at the midpoint, it would be valued at about $14 billion.

According to its IPO’s preliminary prospectus, XP, which is based in Sao Paulo and incorporated in the Cayman Islands, wants “to invest in new financial services verticals that we plan to enter or have recently entered into, such as digital banking, Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term and insurance, to fund potential future acquisition Acquisition Acquisition means acquiring or taking possession or the securing of property, services, or abilities. To put it simply, it is the act or process of acquiring or gaining. You can acquire a work of art, you can acquire an ability such as speaking another language, you can acquire a business or shares in a company and you can acquire an accountant's service. For example, you can acquire a new car. In a broad sense, Acquisition can mean the act of taking ownership or possession of something. There Acquisition means acquiring or taking possession or the securing of property, services, or abilities. To put it simply, it is the act or process of acquiring or gaining. You can acquire a work of art, you can acquire an ability such as speaking another language, you can acquire a business or shares in a company and you can acquire an accountant's service. For example, you can acquire a new car. In a broad sense, Acquisition can mean the act of taking ownership or possession of something. There Read this Term opportunities.”

At that time, Brazil’s largest bank Itaú Unibanco paid $1.9 billion in 2017 to buy a 49.9 percent stake in XP Investimentos SA and options to acquire full control in the future. However, the lender said it does not plan to divest any of its holdings. Instead, General Atlantic and Dynamo VC Administradora de Recursos Ltda., which hold a combined 20%, as well as XP managing partners, who own about 30%, could sell up to 72.5 million class A shares.