A source disclosed to Bloomberg News that Grupo BTG Pactual would be drawing up a bid to acquire the physical commodities unit of JPMorgan Chase & Co. The source, who had direct knowledge about the information, said the Brazilian investment bank was currently in its early-stage review of bidding for JPMorgan's unit. The source refused to be identified as the procedure had been private. The source did not, however, disclose how big the offer would be made.
Another source who was also familiar with the matter had said last week JPMorgan was seeking USD3.3 billion to exit from its physical commodities business. The first round bids, added the source, was due before the end of this month.
RBC Capital Markets analyst Gerard Cassidy thought that JPMorgan would not be offering the commodities unit in pieces. "Selling the division in total would generate the best price as different parts of the business can leverage off one another, creating incremental value that would be lost by selling it in pieces," Cassidy said in an email yesterday.
Both JPMorgan and BTG refused to provide comment on the potential bids.
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