Rough Landing for Multiplus IPO

Multiplus, the miles program for TAM, has priced an IPO well below the bottom of the range amid substantial turbulence. “The IPO market is not as simple today as some people would think,” says a banker on the deal, downplaying the fact that the deal priced at 24% below the BRL21.00 midpoint and 11% under the bottom of a wide BRL18.00-BRL24.00 targeted range. The deal’s 39.3m shares priced at BRL16.00, resulting in proceeds of BRL629m. A 15% shoe will be exercised, bringing total proceeds to BRL724m. A 5.9m share hot issue was not exercised, say executives on the trade. Had the company issued all of the units at the midpoint, total proceeds would have been BRL1.1bn. A US-based investor who had expressed interest said that on the day before pricing, most of the interest in Multiplus was at the lower part of the range. BTG Pactual and Credit Suisse led the deal, the year’s second IPO. Aliansce, the first, priced 22% below its targeted midpoint. Investors remain picky and markets are have lacked conviction in the past week, making for challenging conditions to float new equity. Two other follow-ons have already been pulled this year, namely Metalfrio and M. Dias Branco. Today, Brazilian homebuilder PDG Realty is scheduled to price a BRL1.7bn follow-on. Investors say priority investors and Vinci, the fund that has committed to purchase a part of the offering, already account for a full book. Other buyers are expected to commit.