LAN Auctions Shares

Chilean airline LAN will today auction 21.8m shares, or a 6.4% stake, on the local exchange for a minimum price of CLP9099.58 per share, according to a regulatory filing. Based on the minimum price, the total sale could be worth $367.7m. The shares belong to Axxion and Inversiones Santa Cecilia, investment vehicles controlled by Chile’s president elect Sebastian Pinera. Chilean brokerage Celfin Capital is managing the auction. Costa Verde Aeronautica, the investment vehicle controlled by the Cueto family, acquired an 8.6% share in the airline from Pinera’s vehicles on February 23. It already held a 25% stake in the airline. After the 6.4% stake is auctioned, there will be an 11% stake remaining in the investment vehicle’s hands. One potential buyer is said to be Brazil’s TAM airlines. Brian Moretti, equities analyst at Planner Corretora in Sao Paulo, writes in a research note that TAM has around $725m in cash, enough to acquire the remaining stake, which, if sold at CLP9,099.58 per share, could be worth about $575m. Pinera had promised during his campaign that he would divest his 26% stake in the airline held by Axxion and Inversiones Santa Cecilia by March 11, when he is slated to take the presidency.