Argentina’s Emdersa Faces Tough IPO Prospects

Emdersa, an Argentine power distribution company, will look to price an IPO today in Buenos Aires, Luxembourg and New York, but it is facing an increasingly discerning investor base, which may diminish the valuation. Late last week, the company said it wanted to price155.6m ordinary class B shares at ARS3.70-ARS4.40 and global depository shares at $11.75-$13.97. Wary of skewed economic data and heavy-handed government intervention in the economy, investors have punished Argentine assets harder than most other LatAm countries. In addition, the deal, which is relatively small in size, includes secondary share sales by private equity investors such as JPMorgan Overseas Capital, GPU Argentina Holdings, Whitewater EMCO and EMCF, and D.E. Shaw Laminar Emerging Markets. JPMorgan and Merrill Lynch are leading the offer.