M&A: Esteves Claws Back Pactual

The $2.475 billion purchase of UBS Banco Pactual will be paid for in cash and the assumption of liabilities, including a deferred compensation package. In 2006, former Pactual managing partner Esteves sold his shop to UBS for $1.0 billion cash and up to $1.6 billion in compensation deferred to 2011 – subject to performance conditions which were met – and rose to become the Swiss bank’s global head of fixed income. UBS also retained $500 million in shares for Pactual and UBS employees, payable beginning on the fifth anniversary of closing. It estimated the present value of the deal at $2.5 billion at the time, and UBS expects the sale to result in a small loss. BTG will apparently assume the compensation liabilities as part of the transaction, but it declines to comment on the specifics of the financing. The deal was negotiated privately, with no external advisors. Neither side...