Employees Seen Unlikely Buyers of Isagen

Management and employees of Colombia’s Isagen have announced they are interested in acquiring the 57.66% stake in their employer through a management buy out. Based on the closing price of Isagen’s shares August 24, the stake is worth $1.8bn. However, a banker close to the negotiations is skeptical about the workers’ chances. “I find it very difficult for them to do. They could buy up shares, but I doubt they will be able to buy the entire stake. This is a huge company. Even for a multinational it would not be an easy acquisition to make,” he says. The employee group, called “Duenos de Isagen,” values the stake at around $1.5bn and says that it intends to get financing from private equity groups, which the banker close to the deal also says is unlikely. The banker also says that Colinversiones, rumored to be a possible bidder, might be able to consume the government’s stake in Isagen, as the asset is in line with its core business of power plants and energy generation. He adds that the deal “would still be a big bite to chew” for the company. Credit Suisse and Inverlink are advising Isagen on a sale. Shares closed at COP2,320, up 1.09%, Monday.