BHG Raises Follow-on

Brazil Hospitality Group (BHG) has priced a BRL378m ($187m) equity follow-on, conceding a 3.9% discount in an oversubscribed deal. The demand had been in place heading into Thursday’s pricing, with the only real variable the issuer’s satisfaction with the price level it could get amid the recent market volatility, according to people following the sale. The hotel operator is selling 21.6m primary shares, including a 15% greenshoe, at BRL17.50 each, according to the CVM. The price came versus a BRL18.21 close Thursday, with the shares having slipped 14.5% since closing at BRL21.30 March 20. BHG plans to use 80% of the proceeds for hotel acquisitions, 10% for greenfield projects and 10% for improvements to existing hotels and for working capital. BTG Pactual, Bradesco, Espirito Santo, Goldman Sachs and Itau managed the transaction. BHG is controlled by private equity firm GP Investments, and operates 49 hotels throughout Brazil. Next up in the ECM is the IPO of Brazil’s Alupar Monday, which will kick off a week of deals culminating with the IPOs of Smiles and BB Seguridade.