BB Seguridade, the insurance arm of Banco do Brasil carved out earlier this year, plans to list ADRs, it says. It does not indicate that new funds would be raised in the operation. BB Seguridade raised $5.74bn-equivalent in its IPO in April, with the shares up 42.5% through Friday.
Category: Equity
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Brazilian IPO Struggles
Ser Educacional set a below-the-range price Friday for an IPO targeting BRL620m ($286m), before regulators stepped in to suspend the transaction on a technicality. The for-profit educator priced at BRL17.50 per share, according to people familiar with the terms, below the BRL19.50-BRL23.50 range. However, the CVM decided later Friday to postpone the sale for up to 30 days, due to “the prospectus not having complete, precise and current information,” the regulator says. The CVM adds that the suspension may be removed once the issuer corrects the problem. The effect on the pricing was not immediately clear late Friday. Ser is selling 35.4m shares, assuming a 15% greenshoe, at BRL17.50 each, indicating a BRL620m total. The deal had multiple times demand at its pricing point, according to a person familiar with the terms. Half of the base deal was to be secondary shares sold by owners including founder and controller Janguie Diniz. The issuer focused on Brazil’s rapidly growing North and Northeast is raising funds for acquisitions and organic growth. BTG Pactual, Credit Suisse, Goldman Sachs and Santander are managing. Peer Anima Educacao, targeting a BRL500m IPO, is to follow next week. Even if the Ser deal stands, the price level is not good news for fellow Brazilian issuers hoping to get out the door before 2014, notably travel agency CVC, which has re-filed for an attempt at an IPO. “Brazil is still the same game, the smaller the deal the more challenging it is,” says a Brazil-based ECM banker, noting that the same difficulties remain as in 2011 and 2012 – international investors need size and bankers don’t give their clients realistic price targets. Next year, he expects activity to be compressed into 1H 2014, due to the World Cup and elections. Brazilians have raised $12.64bn in the ECM so far this year from 30 transactions, including Ser, according to Dealogic data, with $5.74bn coming from the BB Seguridade IPO alone. This is out of a $33.98bn LatAm total from 7
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Via Varejo Readies FO
Via Varejo has filed for an equity follow-on, it says. The Brazilian retailer is planning to sell both primary and secondary shares. Size and timing remain to be determined, though the controlling Klein family indicated earlier this year that it planned to sell 16%. The planned sale is to include units representing one common and two preferred shares. Bradesco, Credit Suisse and Bank of America Merrill Lynch have been hired to manage. The Kleins own 47% of Via Varejo, which runs the Casas Bahia and Ponto Frio stores.
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Brazilian Educator Set for IPO
Ser Educacional is scheduled to price today an IPO targeting more than BRL700m ($326m), in a deal that should offer the latest test of market appetite for the Brazilian consumer story. The for-profit educator is offering 15.4m primary and 15.4m secondary shares at BRL19.50-BRL23.50 each, according to regulatory documents, meaning a BRL761m deal at the midpoint if a 15% greenshoe is included. The focused on Brazil’s rapidly growing North and Northeast is raising funds for acquisitions and organic growth, and is betting that the sector – one of the strongest in the Brazilian consumer demand picture – can still attract investors that may be skittish about other components of the Brazilian story. The sellers in the secondary portion include founder and controller Janguie Diniz. Ser Educacional claims to be the biggest educator in the two regions, and booked BRL85m in Ebitda in 1H 2013, up from 49m in 1H 2012, and BRL90m in all of 2012, up from BRL56m in 2011. BTG Pactual, Credit Suisse, Goldman Sachs and Santander are managing. Peer Anima Educacao is to follow next week.
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CCU Wraps up Equity Raise
Compania Cervecerias Unidas (CCU) has concluded the second step in an equity follow-on raising CLP325bn ($658m), it says. The Chilean beverage company had a 98% hit rate, selling 50m of the 51m shares on offer, including of 27.4m of 28.4m shares available in the preferential rights period closed Thursday. The shares sold at a CLP6,500 price that was set last month during the first phase, in which 22.6m shares were sold. Shares in the market closed at CLP Thursday. CCU is raising funds for organic growth and acquisitions. IRSA, owned equally by Heineken and the Luksic family’s Quinenco vehicle, is expected to control 60% of the company post-float, with the market holding the rest. JPMorgan, Citi, Deutsche Bank, and Goldman Sachs are managing the international portion, and BanChile and LarrainVial are handling the local portion. CCU in a June meeting agreed to a capital increase of up to CLP340bn.
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Interacciones Sale Relies on Domestic Buyers
Domestic buyers accounted for more than 80% of the book on Grupo Interacciones’ MXP4.2bn ($327m) equity sale, according to pricing documents. The Mexican specialist in public sector and infrastructure lending received 2x demand in the “re-IPO” follow-on Wednesday, done to increase the issuer’s overall float and raise funds for expansion. The Mexican specialist in public sector and infrastructure lending sold 39m primary shares and 30m secondary shares at MXP61.00 each, towards the bottom of the MXP60.00-MXP69.00 range. Secondary share sellers included controller Carlos Hank and members of his family, who saw their holding reduced to 69% from more than 90%. Barclays and Credit Suisse were global coordinators, with Banorte-Ixe and GBM as bookrunners on the domestic portion.
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Interacciones Re-IPO Prices Near Bottom
Grupo Interacciones has priced near the bottom of the range an equity sale that should raise MXP4.2bn ($327m), according to people familiar with the transaction, viewed as a “re-IPO.” The Mexican specialist in public sector and infrastructure lending is selling 39m primary shares and 30m secondary shares, assuming the use of a 15% all-primary greenshoe, at MXP61.00 each. The issuer had elected to set a MXP60.00-MXP69.00 range despite the trade not technically being an IPO, as less than 10% of the shares were in the hands of non-controllers. It was not immediately clear Wednesday night what portion of the shares were placed with international versus Mexican buyers. In addition to expanding its free-float, the financial group anchored by Banco Interacciones is raising proceeds to expand operations, specifically sub-sovereign and infrastructure lending. Secondary share sellers include controller Carlos Hank and members of his family. The issuer expected a free float of at least 31% following the sale, with the Hank family taking its stake from 90% to below 70%. Barclays and Credit Suisse were global coordinators, with Banorte-Ixe and GBM as bookrunners on the domestic portion. The transaction would appear to wrap up the Mexican new equity issuance scheduled for the September-October window. Brazilian Ser Educational is scheduled to price a BRL700m ($321m) IPO Friday.
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Local Majority in Lala IPO
Mexican buyers made up the majority of Grupo Lala’s MXP14.06bn ($1.01bn), according to pricing documents, with international buyers accounting for 43%. The transaction drew more than 8x demand Tuesday and priced 511 primary shares, assuming a 15% greenshoe, at the top of a MXP23.50-MXP27.50 price range. Lala is raising funds to repay bank debt and to fund its growth plans, which include investments in its existing capacities as well as possible acquisitions in Mexico, Central America and “new geographies.” JPMorgan was global coordinator, joined by Morgan Stanley and BBVA as bookrunners and Santander, Inbursa, Banorte-Ixe and Banamex as co-managers. The shares traded up 7.6% Wednesday.
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Tupy Expands Float
Tupy has priced a BRL523m ($240m) equity follow-on, according to the CVM, boosting the Brazilian Iron parts maker’s float. In the deal, functioning in some ways as a “re-IPO,” the issuer is offering 29.9m primary shares at BRL17.50 each, including a 15% greenshoe. The price represents a 5.9% discount to Wednesday’s 18.59 closing price, though the shares, according to ECM bankers, are in relatively few hands and do not trade frequently – one of the problems the sale sought to correct. Shares were at BRL19.45 when the deal was re-filed in August following an earlier postponement. Tupy is raising funds to invest in expansion and in projects that will help lower costs. Banco do Brasil, Brasil Plural, BTG Pactual, Citi and Itau managed the sale. The auto parts specialist operates in Brazil and Mexico. Next up in Brazil, and in the region, for-profit education provider Ser Educacional is scheduled to close books today and price Friday morning an IPO targeting BRL700m. Peer Anima is to follow next week.
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Mexican Dairy IPO Prices at Top
Grupo Lala has priced an IPO at the top of the range, according to people familiar with the transaction, a deal that should raise MXP14.04bn ($1.08bn) and was multiple times subscribed. The Mexican dairy and food products company priced Mexico’s biggest IPO of the year Tuesday night, despite following a 1.2% loss Tuesday in the Bolsa. The issuer is offering 444m primary shares at MXP27.50 each, meaning a MXP14.04bn deal if a 15% greenshoe is included. The price comes versus a MXP23.50-MXP27.50 range, and continues Mexico’s strong pace in ECM this year while offering investors a new angle to the Mexican consumer food products play. The deal was to result in a minimum 19% free float, with the controllers’ holding going from 69% to at most 56%. Lala is raising funds to repay bank debt and to fund its growth plans, which include investments in its existing capacities as well as possible acquisitions in Mexico, Central America and “new geographies.” JPMorgan was global coordinator, joined by Morgan Stanley and BBVA as bookrunners and Santander, Inbursa, Banorte-Ixe and Banamex as co-managers. The transaction is the second-largest IPO in LatAm this year after BB Seguridade, and the largest Mexican IPO since Macquarie’s Fibra last year. Today in the region’s ECM, Tupy is scheduled to hold a follow-on to raise more than $250m-equivalent, and Grupo Interacciones an IPO targeting $300m.