Category: Equity

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Geopark raised $100.1m from its US listing on Thursday after …

Chilean oil and gas explorer Geopark is due to price its SEC-registered IPO today. The firm said last month it planned to sell 20m shares at $8 to $10 each. Equity markets have performed poorly in recent weeks, and investors have been wary of participating in new issues amid heavy volatility, but LatinFinance understands the deal is still set to proceed. BTG Pactual, Itau and JPMorgan are lead managers on the offering, which is to facilitate future access to international equity markets and finance potential acquisitions in South America. Also in the market today is Office Depot de Mexico. Grupo Gigante is targeting a sale of 253m ODM shares at between MXN16 and MXN18 apiece. BBVA Bancomer and Credit Suisse are leads. Viva Aerobus is also in the pipeline with an IPO that is expected to be priced on February 11.

Grupo Gigante’s sale of 253m shares in Office Depot de Mexico is advancing and is due to be priced on Wednesday, LatinFinance understands. The news comes after another day of losses on stock markets in the region and globally. Brazil’s Ibovespa index lost 3.13% on Monday — dragged down by a particularly dire day for shares of Petrobras and construction firm Gafisa — while Chile’s IPSA fell 1.34%, echoing losses in global indices. The Mexican exchange was closed on Monday, but has also suffered this year: it closed at 40,880 on Friday, down 3.8% from its early-January high. Some large accounts were waiting until the last opportunity to submit bids for the Office Depot sale, to minimize market volatility, LatinFinance understands. The all-secondary sale could raise as much as MXN4.5bn ($333m) if it lands at the top of the MXN16 to MXN18 price range set last month, excluding a greenshoe or hot issue allocation. BBVA Bancomer and Credit Suisse are arranging the sale.

Cruz Blanca Salud’s board of directors has recommended shareholders participate in a tender offer for control of the firm by Spain’s Grupo Bupa Sanitas, saying they see the deal as favorable. The Spanish firm launched a tender for up to 56% of the firm earlier this month. It is offering CLP525 ($0.97) per share, and is targeting a minimum of 50.1% of the firm, equal to 360m shares. The directors presented their opinions on the offer in a regulatory filing published on Wednesday, saying the price was attractive and that liquidity could fall after the acquisition. Some also pointed to uncertainties around potential changes to regulations governing Chile’s health system. Cruz Blanca’s shares closed at CLP462.5 on Wednesday, down 2.85% on the day and 4.8% from a week earlier. The offer is open until February 21. Banchile is arranging the transaction.

LQ Inversiones Financieras booked CLP448.9bn ($817m) from its sale of 6.7m Banco de Chile shares on Tuesday, in spite of a rocky market backdrop. Heavy local support underpinned the transaction, although for international accounts bidding for the paper, the decision proved challenging as stock markets fell and as equity funds saw continued outflows. LQIF sold the shares at CLP67 each, after investors placed around CLP1.2tn in orders. Local pension funds bought 43% of the deal, despite being the group that was scaled back most heavily — they were prorated by 73.2%. Other Chilean institutional investors bought 18% of the deal, and retail accounts, 9%. International investors bought 3% of the sale in local shares, prorated by 64.1%, and a further 27% was subscribed in American Depositary Shares. The price came at a 1.9% discount to Tuesday’s CLP68.32 close, and much less than the CLP74.38 level where Banco de Chile’s stock was trading on January 9 when the deal was announced. The share price drop followed sharp falls in stocks across the emerging markets, hit by political and financial instability in several countries as well as unsettling economic data from China. Pain in equity markets has been exacerbated by fund outflows, also. Investors had taken $550m out of dedicated LatAm equity funds in the year to January 22, and withdrew $8.87bn from such funds in 2013, according to data from Barclays. One ECM banker highlighted, however, that those figures obscure a bias for investors to move money away from Brazil and into other parts of the region. The Banco de Chile equity sale cuts LQIF’s ownership to 51%, from 58.4%, of the firm. Citi was global coordinator, and Bank of America Merrill Lynch, BTG Pactual, and Deutsche Bank were bookrunners. Banco de Chile is the country’s largest lender with a 19.3% market share. It reported assets of CLP25,261bn ($50.1bn) at the end of the third quarter.