Colombia’s Cementos Argos has named JPMorgan and HSBC to lead a planned equity follow-on, according to sources familiar with the deal. Bank of America Merrill Lynch, Credit Suisse and Itau are also on the transaction. Details and timing remain to be determined, but the maximum size approved recently by shareholders is 250m shares, which would raise COP2.18trn ($1.19bn) at the most recent COP8,700 closing price.
Category: Equity
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BTG Preps RE Fund of Fund Retap
BTG Pactual is preparing to reopen its real estate fund of funds for up to BRL500m. The Fundo de Investimento Imobiliario (FII) BTG Pactual Fundo de Fundos invests in other FII funds, as well as in other real estate instruments, including certificados de credito imobiliarios (CRI) and letras hipotecarias (LH). As of December, 84% of the fund’s assets were FII shares, and 14% CRI. The transaction is able to be upsized by as much as BRL150m. BTG was due to conclude the rights offering period by April 5, and wrap up the reopening, the fund’s fifth, by May, according to a prospectus., BTG is managing the transaction. The fund’s shares closed at BRL124.00 each.
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Enersis Tops 99%
Chile’s Enersis reached a 99.04% shareholder subscription rate for its CLP2.84trn ($6.00bn) equity capital increase, it says. The energy holdco had sold 16.28bn of 16.44bn shares on offer as of the subscription period’s close, with the remainder to be offered in an auction today, at CLP173 each. The subscription period included the $625m sale of American Depositary Shares (ADS). JPMorgan, BTG Pactual and Bank of America Merrill Lynch were global coordinators on the ADS sale, with Banchile, BBVA, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, LarrainVial, Morgan Stanley and Santander as bookrunners. JPMorgan, Celfin, BBVA, Santander, LarrainVial, Banchile and BAML managed the local side. The controversial transaction was approved in December, after months of back and forth with regulators and minority investors. Endesa subscribed its portion with its LatAm assets that don’t already belong to Enersis, and needed negotiations with Chilean pension funds and multiple outside evaluations to reach agreement on the assets’ value. The process will raise funds for acquisition opportunities and streamline Endesa’s operations in LatAm by placing all of its holdings under Enersis. Enersis shares closed at CLP182.41 Wednesday.
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Investors Line Up for Brazilian Mall Follow-on
Brazil’s Multiplan has priced a BRL705m ($351m) follow-on, coming at less than 1% discount and using maximum overallotment options. The transaction was multiple times oversubscribed, according to people familiar with the terms. The mall operator priced 12.2m primary shares at BRL58.00 each, according to the CVM, versus Wednesday’s BRL58.40 closing price. The share total includes a 20% hot issue, as well as the assumed exercise of a 15% greenshoe. “Of all the shopping mall companies, this is probably the best managed,” says a Brazil-based investor participating in the deal. “It doesn’t stand out on a price-to-earnings basis, but if you look at the assets they have, the company is likely trading below its net asset value,” he adds, highlighting the land Multiplan owns and its projects in development. The buyside continues to see shopping malls as a sector resistant to much of the gloom surrounding the Bovespa and Brazil’s economy. Multiplan’s shares are down about 3.5% in 2013, compared to a 7% drop in the Bovespa. The transaction kicks off a month scheduled to feature several Brazilian ECM deals, and underscores the relative ease with which follow-ons can get done. “The equity market is still weak in Brazil,” says a New York ECM banker. He notes the polarization continuing from last year in which the market is receptive for follow-ons from established issuers, but prohibitive for new or illiquid names. The April pipeline includes both types of issuer, with follow-ons from Multiplus and Abril Educacao, and IPOs from Biosev and Smiles. A carve out IPO of Banco do Brasil’s insurance business is seen as big enough and backed by a well-enough known name to overcome IPO skepticism, though not at any price, bankers say. Multiplan is raising funds to develop new projects and expand existing properties. The issuer’s free float was not expected to change significantly following the offering, remaining at about 40%. Bank of America Merrill Lynch, Bradesco, BTG Pactual, Credit S
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Abril Sets FO Date
Brazil’s Abril Educacao has set April 23 as the pricing date for its equity follow-on, according to a prospectus, targeting more than BRL600m ($299m). The educational company plans to sell 3.1m primary units and 9.9m secondary units, meaning a BRL607m deal at Tuesday’s BRL46.71 closing price. The totals assume a 15% greenshoe option. A 20% hot issue is also available. The secondary shares are to be sold by members of the controlling Civita family and private equity funds managed by BR Investimentos and Banif. Abril plans to use the primary proceeds to make acquisitions. Bank of America Merrill Lynch, BTG Pactual, Bradesco, Credit Suisse and Itau are managing. Abril raised $273m-equivalent in its 2011 IPO.
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Biosev Launches Guaranteed IPO
Biosev has launched an IPO targeting more than BRL800m ($398m), setting an April 15 pricing for its second attempt to debut on the Bovespa. To improve its chances, the Brazilian sugar, ethanol and bioenergy unit of Louis Dreyfus Commodities is selling the 53.7m primary shares at BRL15.00 each with a put option at BRL0.01-BRL2.00 each, according to offering documents. This would indicate a BRL859m transaction at the BRL16.00 midpoint, with the company getting proceeds of BRL806m. The totals assume a 15% greenshoe. The options, included to sweeten the deal for investors skeptical about the prospects for price increase, are issued by a sister LDC entity and exercisable in July 2014 at BRL16.57. The exercise price represents the BRL15.00 offer price plus the expected appreciation of the DI through July 2014, guaranteeing that investors don’t lose money on the deal in the first year. The inclusion of a put option of this type represents a first for the Brazilian ECM, and for many points to the continuing struggles Brazilian IPO issuers face to get deals done. Biosev plans to spend 70% of the proceeds on expansion, including upgrades, acquisitions and greenfield projects, and the remainder to pay down some BRL200m in USD and BRL-denominated debt due 2014-2024. The formal roadshow was due to start this week. BTG Pactual, Banco do Brasil, Bradesco, Itau and JPMorgan are managing the transaction, with Itau added since an initial prospectus was filed earlier this month. The current bank lineup adds BTG and leaves off Santander and Banco Votorantim, who were on the previous attempt. Biosev pulled the original deal on the night of pricing in July 2012, unable to find demand within its price range.
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Chilean Builder Prices IPO below Target
Moller y Perez-Cotapos (MPC) priced a CLP42.0bn ($89m) IPO, the first in Chile this year, at a price below expectations before shares traded down Tuesday. The construction company and real estate developer priced 39m primary shares and 67m secondary shares at CLP400 each, coming below the CLP430 floor price that the issuer had set and subsequently waived. Total demand reached CLP61.1bn, with CLP27.2bn coming at an amount above the floor price. The issuer had been aiming for more than $100m-equivalent. Analyst expectations had varied, recommending buying the shares at levels ranging from below CLP400 to as much as CLP480. The secondary shares are sold by Citi Venture Capital. MPC is looking to use 50% the proceeds to strengthen its capital structure and pay debt, and 50% to help fund a $500m growth plan. Some 31% was purchased by local institutional investors. LarrainVial managed the sale. It was Chile’s first IPO since an $88m-equivalent sale from fellow construction sector debutant Echeverria Izquierdo in August 2012. Moller shares closed at CLP388.46 Tuesday.
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Enersis Clinches Equity Minimum
Chile’s Enersis has passed the minimum rate of subscription in its equity capital raise that would allow controller Endesa to stay under a 65% ownership limit, it says, ahead of the close of the domestic subscription period late Tuesday. In the process targeting $6.02bn, minority holders had subscribed 3.17bn of the 16.44bn shares on offer through Monday, meaning the Spanish parent would be assured of staying below the 65% limit and avoid needing to make a required tag-along offer. The final results of the subscription period were to be announced as soon as today, along with possible plans for the sale of any remaining shares. People following the deal expected more than 95% subscription as of late Tuesday, meaning the deal could close this week. Before the increase, Endesa had about a 61% stake in Enersis. Enersis raised $625m from the sale of American Depositary Shares (ADS) as of the close of the ADS subscription portion last week. In total, Enersis is targeting a maximum CLP2.84trn ($6.00bn), by offering up to 16.44bn shares at CLP173 each. JPMorgan, BTG Pactual and Bank of America Merrill Lynch were global coordinators on the ADS sale, with Banchile, BBVA, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, Larrain Vial, Morgan Stanley and Santander as bookrunners. JPMorgan, Celfin, BBVA, Santander, Larrain Vial, Banchile and BAML are managing the local side. The controversial transaction was approved in December, after months of back and forth with regulators and minority investors. Endesa plans to subscribe its portion of the transaction with its LatAm assets that don’t already belong to Enersis, and needed negotiations with Chilean pension funds and multiple outside evaluations to reach agreement on the assets’ value. The process will raise funds for acquisition opportunities and streamline Endesa’s operations in LatAm by placing all of its holdings under Enersis. Enersis shares closed at CLP182.03 Tuesday.
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Multiplan Oversubscribed Heading into FO
Brazil’s Multiplan is heard with oversubscribed books ahead of today’s scheduled pricing of an equity follow-on targeting BRL600m ($299m). To raise funds for growth, the mall operator is planning on selling 10.4m shares, assuming a 15% greenshoe. This would indicate a BRL602m deal based on Tuesday’s BRL57.90 closing price. A 20% hot issue is also possible. Bank of America Merrill Lynch, Bradesco, BTG Pactual, Credit Suisse and Itau are managing. Multiplan’s last widely-marketed visit to the ECM was in 2009, raising BRL670m, which it followed with a BRL122m accelerated bookbuild in 2010.
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UAG Aims for Montevideo IPO
Union Agriculture Group (UAG) is preparing to raise $50m-$100m through an IPO in Uruguay – what would be the Montevideo Bolsa’s first IPO since 2006. The farmland developer is looking to sell 2.2bn shares it says, in its second IPO attempt after a pulled 2012 US transaction. UAG is raising funds for further land acquisitions, of about 35,000 hectares. Discussions have started with investors, and the issuer expects to price in the next two months, it says, with an indication of price coming closer to the transaction date. There are no bookrunners attached to the deal, according to a company spokesperson. UAG targeted $200m in its abandoned 2011 deal, led by JPMorgan and Credit Suisse. It has since raised more than $100m in equity capital through private transactions. NZ Farming Systems Uruguay raised $82m-equivalent in a 2006 IPO, the last local Uruguayan deal, according to Dealogic data.