Brazilian billionaire Andre Esteves plans an initial public offering for his BTG Pactual investment bank in 2010, Valor Economico newspaper reported, without citing a source for the information.

The IPO would resume a long-standing plan for Esteves and partners of Pactual that were canceled when the Brazilian bank was sold to UBS in 2006, the daily said.

Esteves' BTG, or Banking & Trading Group, agreed to buy back Pactual from UBS for about $2.5 billion in April. The takeover was approved by Brazil's central bank late on Friday.

UBS owed Pactual partners including Esteves and Gilberto Sayao, who controlled the Brazilian bank, nearly $2 billion in bonus and other payments from the 2006 purchase, Valor said.

BTG assumed that debt and Esteves is finalizing discussions with Sayao and other Pactual partners who have decided to leave the firm as part of the BTG takeover, the daily reported.

An additional hurdle in the negotiations stems from a non-compete clause Esteves wants to impose on departing partners, Valor said. As many as 45 percent of Pactual partners have decided to leave the bank, the newspaper said.

BTG's media relations department did not immediately return a call seeking a comment on the Valor Economico report.

(Reporting by Elzio Barreto, editing by Dave Zimmerman)