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After Itaú exercised the option to buy another stake in XP two weeks ago, of 11.36%, investors began to approach both to discuss a potential purchase of the shares. One interested buyer in talks is U.S.-based Charles Schwab, Valor’s business website Pipeline found out.
Finding a buyer for a relevant stake paves the way and speeds up Itaú’s intended exit, which, in principle, is seen as happening gradually after two block trades since last year. XP is very interested in moving forward with the talks with Schwab and replacing Itaú with a new strategic partner, the sources said.
The U.S.-based company inspired XP to become a retail investment platform. It is not the first time XP and Schwab get closer. The American financial firm studied investing in Guilherme Benchimol’s company years ago, but the size of the business did not make sense for Schwab then.
Although the seller is Itaú, XP has been directly involved in this matter to reach an outcome that makes sense for the company in the long run, one source said. XP said last week that it would study buying Itaú’s stake. XP unveiled Thursday a share buyback program of up to R$1 billion. Finding a partner in the market is a more economical and much more strategic way to do so.
XP started the international retail expansion with a project of international investment accounts abroad – it already offers “private” clients access to products through offices in New York and Geneva. XP could stand out with Schwab on its board and explore these markets.
“There are interested buyers approaching XP and Itaú. All they have to do is to put it on the block,” said another source, who declined to name investors. The potential sale of Itaú’s stake is a window for investors with a long-term vision to buy a relevant position into XP at a discounted price – the company continues in operational growth mode, but shares dropped to $18.95 from $27 in the IPO, in December 2019.
XP took another step to go global on Thursday. The company rose almost 7% right after unveiling XTAGE, a trading platform for digital assets in partnership with Nasdaq Market Technology, the group that operates the U.S.-based technology exchange.
XP is valued at $10.8 billion on Nasdaq. Schwab is worth $123 billion.
The original story in Portuguese was first published on Valor’s business website Pipeline.
Source: Valor International