CorpBanca has responded to the amended complaintregarding the proposed merger of CorpBanca and Banco Itaú Chile brought by Cartica Management, LLC in the United States District Court for the Southern District of New York. CorpBanca will file a pre-motion letter seeking permission to file two separate Motions to Dismiss Cartica’s newly filed complaint, saying that Cartica now seeks money damages that would be to the exclusive benefit of Cartica and no other CorpBanca shareholders. Cartica filed the amended complaint after the Court held a conference to discuss proposed motions by the defendants to dismiss the lawsuit.
CorpBanca issued the following statement:
“CorpBanca continues to firmly believe that Cartica’s claims are entirely without merit, and that Cartica’s interests are not aligned with those of other CorpBanca shareholders. Cartica originally pretended that it was filing its complaint on behalf of minority shareholders to obtain more information about the transaction. In fact, CorpBanca has supplied an abundance of disclosures about the proposed merger throughout the process, including the transaction documents, the risks and benefits of the deal, and the prospects for the post-merger bank. CorpBanca’s shareholders have all material information they need to cast a fully informed vote.
Faced with all this information, and CorpBanca’s letters to the Court explaining the significant flaws in Cartica’s Complaint, Cartica has revealed its true colors and motivations: To seek money for its trading in CorpBanca shares over the last six months, exclusively for its own benefit and to the detriment of the other shareholders. Cartica’s new claim, which was omitted from its press release, demonstrates that Cartica is looking for special treatment and a coerced payout on its investment in CorpBanca.
Cartica has publicly stated that it supports a merger between CorpBanca and Itaú. Yet, it asks the Court to enjoin the transaction and has now added Itaú to the lawsuit. This is nothing more than a desperate attempt to proliferate its self-serving campaign. Cartica is trying to prevent other CorpBanca shareholders from casting their votes in favor of the transaction. And it now appears to be using this lawsuit to try to hold up the deal in order to extract a payment from CorpBanca. This is not shareholder activism in the name of good corporate governance but rather an orchestrated scheme to threaten a valuable merger for a personal profit.
The new story in Cartica’s amended complaint also raises concerns about Cartica’s trading practices. Cartica says that it purchased additional shares of CorpBanca during the last six months based on information it obtained in a private meeting with CorpBanca’s majority shareholder CorpGroup. While no material non-public information was disclosed at any time by CorpBanca or its majority shareholder in its discussions with Cartica, the activist hedge fund apparently attempted to trade on these discussions to its own advantage and to the detriment ofother CorpBanca shareholders from whom it bought shares. While Cartica tries to hold itself out as a long-term investor and champion of minority shareholders, the truth is that it has been actively trading CorpBanca shares the whole time, and this suit is a little more than an effort to justify its speculative and misguided trading strategy to its investors.
With respect to the claims in Cartica’s amended complaint, CorpBanca strongly believes that Cartica’s suit continues to lack merit. Cartica’s request for additional disclosures, including request for immaterial and extraneous details, and in many cases, nonexistent materials, amounts to nothing more than an endless paper chase. CorpBanca has published massive amounts of information with respect to the proposed merger, far in excess of that required by law, including the Transaction Agreement, the Shareholders Agreement, the loan agreement, an SEC filing describing the benefits and risks of the deal, financial information on both CorpBanca and Itaú, pro forma financial statements regarding the merged bank, fairness opinions rendered by two leading global investment banks in connection with the deal, and a 100-page disclosure document describing in detail the deal, its structure, terms, background and conditions.
With respect to its securities claim, Cartica continues to complain about CorpBanca’s business decisions in Chile, which are outside the jurisdiction of a U.S. federal court. Yet, Cartica has never filed any case in Chile regarding CorpBanca’s business decisions, the only proper place for such a dispute. With respect to its claims of deficiencies in 13D filings by CorpBanca’s controlling shareholder, Cartica is seeking additional information about Corp Group’s agreements with Itaú that were disclosed to the public long ago.
CorpBanca strongly believes that the proposed transaction is in the best interests of CorpBanca shareholders and that Cartica’s interests are not aligned with those of other CorpBanca shareholders. CorpBanca remains firmly committed to the dismissal of Cartica’s self-serving lawsuit.”