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Itau Unibanco's CEO Discusses Redecard's Public Tender Offer (Transcript)

I would like to start saying that we confirm, as announced, the price of 35 reais per share which is inside the range that Rothschild appraised, so we basically confirm our previous announcement on price; but we changed an important condition on the offer which is the fact that we will only go through as long as we have two thirds of the free float shareholders registered in the offer agreeing with our offer.

And we decided if we do not achieve this level of agreement among shareholders registered, we will keep the company in the Novo Mercado situation. This decision I think is an important decision and basically the decision among the requirement of many shareholders of Redecard to us that they would like to see Redecard staying in the Novo Mercado if we are not fully successful in our offer.

I would like to exchange with you some of the views on the acquiring business and Redecard in particular, which are very important because especially here in Brazil I believe that many people do not understand exactly the fundamentals and the forces that move the pieces. As you know until the ‘80s Redecard did not exist; Credicard was a company that issued cards and had the acquiring powers in Brazil, the exclusivity already at that time. In ‘95, ‘97, Credicard was divided in three companies: Redecard itself, as we know, which was the acquiring business; Credicard, which was the issuer; and Orbital, the processor. The three businesses from then on started to move isolated although the shareholders of the three were the same.

Redecard held the exclusivity for the MasterCard brand and this was an important competitive advantage that Redecard had throughout that period until last year (inaudible) 2010 when this was not anymore allowed in Brazil. So Redecard had this exclusivity on MasterCard brand and that made it for Redecard very easy to affiliate commerce and stores that were interested in doing business with Credicard, MasterCard holders. This was a very important thing and as long as you had in the market MasterCard cards issued Redecard would have a very solid business.

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