Category: Brazil

Colombian brokerage firm Interbolsa plans to acquire 100% of Finabank Corretora Cambio after Brazil’s president Lula authorized it to do so. Interbolsa in July had been given the green light to acquire a 41% stake in Finabank. No deal value is disclosed.

Brazil toll-road company Ecorodovias plans to issue BRL600m in 3 tranches, one maturing in 2013 and the other 2 in 2015, according to a prospectus. The 2013 will pay a maximum spread of 2.0% over DI. The second and third tranches’ will be pegged to NTN-B inflation-linked national treasury notes and have a maximum spread of 250bp. Proceeds from the issuance will be used to pay down BRL406.7m in promissory notes and to capitalize Ecopistas, the company unit that manages and operates the Ayrton Senna-Carvalho Pinto highway system. Ecorodovias, one of the largest highway managers and operators in Brazil, is a unit of Italy’s Impregilo. Itau is managing the sale.

Brazil’s Telesp has upped its bid for GVT to BRL50.50 a share, valuing the company at BRL6.49m. The move, made just one day after GVT’s board approved both Telesp and Vivendi as authorized bidders and set a BRL48.00 floor for takeover offers, largely quashes Vivendi’s chances at putting in a new bid for GVT at or above BRL50.40, the minimum level follow-up bid, according to Brazilian law. Any new bid for GVT would have to be a minimum of BRL53.03 per share, 20% higher than Vivendi’s first offer for GVT in September, of BRL42.00. “This increase in [the offer] price seeks to guarantee the success of our [voluntary tender offer for GVT’s shares], while also demonstrating Telesp’s intention to acquire 100% of GVT,” says Telesp in a statement filed with the CVM. The preemptive move by Telesp, which is seen by analysts as offering far better synergies in a combination with GVT than Vivendi, is based on Q3 earnings numbers that confirm Telesp’s interest in the company, even at a higher valuation than its previous bid, says Telesp. “This deal goes way beyond most of the Street’s target prices,” says Valder Nogueira, analyst at Itau, in a report that examines the possibility that Vivendi could find a legal loophole that would allow it to come back with a deal closer to BRL50.40. He concludes that this is unlikely.

The BNDES development bank will today unveil a London office, its first major subsidiary outside Brazil. The UK unit will look to provide coverage of the European market and aid investors interested in Brazilian entities. It will also look to provide support for Brazilian companies seeking to expand internationally as well as already global companies with European interests. The BNDES’s only other overseas presence is in Montevideo, where it has a rep office. Today’s ceremony will be attended by president Lula, finance minister Guido Mantega, chief of staff Dilma Rousseff, central bank president Henrique Meirelles, and Luciano Coutinho, president of the BNDES.

Canada-based Jaguar Mining has entered an agreement to acquire Kinross Gold’s Brazil unit MCT Mineracao for $39m in Jaguar common shares. The unit holds all the mineral licenses for the Gurupi exploration project in Maranhao. A feasibility study Kinross conducted indicated gold resources of 1.6m tons of gold. Closing is expected in one month, says vice president of corporate development Bob Zwerneman, who adds that the deal was privately negotiated.

Investors in LatAm equities have developed an unease with regards to their holdings in Brazil, owing to the IOF tax imposed October 19, as well as general concerns regarding valuations in the region’s largest equity market, according to JPMorgan. In a report based on a recent a canvassing of investors in the week following the news of the IOF, the shop points to outflows from the Bovespa of nearly BRL3bn in the 8 sessions after imposition of the tax and a spike in volatility as a chief indicator of investor sentiment. The impact is partially intended, argue the analysts, who note the Brazilian government is looking for a drop in inflows and an overall pullback in hot money. If this continues, the government may avoid implementing further measures to stem currency appreciation, such as further increase in the IOF, quarantine for investments and other kinds of capital controls. But if the market ignores the tax, these and other measures could quickly become candidates for implementation, says JPMorgan. Investors also find it a challenge to identify fair value in Brazil equity, though the shop says overall sentiment points to remaining interest in Brazil, and the expectation for outsized returns in the coming year versus other LatAm stocks.

Shareholders of GVT, the Brazilian telecom that is the object of a bidding war between France’s Vivendi and Telesp, will vote today to waive a poison pill agreement and authorize both interested parties as bidders. The move will also establish BRL48.00 as the minimum share price at which the company can be sold. In mid-October, Telesp, which is owned by Telefonica, launched a public tender offer for GVT shares at BRL48.00, topping a September verbal bid from Vivendi’s of BRL42.00. Any new offer for GVT must be made at least 5% above the previous, according to Brazilian law, which means interested parties telecom will have to pay a minimum BRL50.40. GVT shares closed Monday at BRL50.40, suggesting investors are betting on a new deal from Vivendi or another bidder. GVT’s main investors include a control block called Global Village Telecom, with 18.0% of the shares, and Swarth Investments, with 8.1%. At Monday’s close GVT’s market cap stood at BRL6.48bn. The result of the vote should be released later today. GVT is advised by Barclays, Goldman Sachs and Credit Suisse, according to Dealogic. Telesp has tapped Santander and JPMorgan. Vivendi is advised by BNP and Calyon.

Banco Fibra has sold $110m in 2016 bonds, upsizing from $100m, according to an IR official at the mid-size Brazilian bank. The 8.5% notes priced at par, in a sale that went mostly to private banking clients based in Europe. The bond comes under the bank’s $1bn global MTN program, and follows a roadshow launched last week. Goldman Sachs is managing the sale. Fibra has issued $359m from its global program, most recently a $150m 2011 in May 2008.