Alpek has launched an IPO targeting as much as MXP11.96bn ($910m), giving investors a look at Mexico’s first large IPO since 2010, as the overall outlook for the country improves. At first glance, analysts see the implied valuation as in line with or slightly expensive to the industry average, depending on where the 379.8m primary shares price within the MXP27.50-MXP31.50 range. Such a deal would raise MXP10.44bn-MXP11.96bn for the Grupo Alfa petrochemicals producer. The share total assumes the exercise of an overallotment option. Pricing is scheduled for April 25. “At that range it could come at the high end of the sector,” says a Mexico City-based equity analyst, spotting the valuation at 6.9x-7.8x 2012 earnings, compared to Mexichem’s 7.6x and a 7.3x sector average. “It is in line with other companies in the sector,” says an analyst at another shop, pointing to 7.0x-7.8x, versus a global average of 7.5x. “There should be strong appetite for this transaction,” says an ECM banker away from the deal, noting he expects a similar demand to Fibra Uno’s well received follow-on last month. The polyethylene and polypropylene producer, many of whose products are used in the food and beverage industry, is raising funds to repay debt and for general corporate purposes. Credit Suisse, Citi, HSBC and Morgan Stanley are managing the sale, in which 75% of the shares are marked for international distribution. It would be the first Mexican IPO since BanRegio raised MXP2.09bn in July 2011, and the first $500m-plus offer since OHL Mexico in October 2010. The deal will provide a further test for new issuance in Mexico, which both bankers and investors have become more optimistic about, considering recent macroeconomic and political developments as well as an outperformance of the Bolsa. “Mexico needs to have more issuance, and it should be quite easily digested, because investors are hungry for diversification in Mexico. Also, Mexico is full of sectors that investors want get acces
Category: Equity
Cedae Ponders IPO
Rio de Janeiro state-owned water treatment company Cia Estadual de Aguas e Esgotos (Cedae) is studying an IPO, it says. Cedae does not give an indication of timing or size, but does note the government would maintain a controlling stake in the company. The company is still in the process of choosing banks to advise in the process, an investor relations official says, declining to give additional details.
Fibria Reschedules FO
Brazil’s Fibria has postponed an expected BRL 1.26bn ($687m) equity follow-on to April 24, from April 19, it says. The Brazilian pulp producer began roadshowing at the beginning of the month for the all-primary sale of 86m shares. This would indicate a BRL1.26bn deal, based on Wednesday’s BRL14.61 close and assuming the exercise of a 15% greenshoe. The sale would be the first offering under the new Fibria name, though both Votorantim Celulose e Papel and Aracruz were longtime Bovespa members, and is done to raise funds for repaying debt and general purposes. Following the sale, the ownership should remain the same, according to the prospectus, with 30% each stakes for Grupo Votorantim and for BNDESPar, and 40% to other shareholders. Itau and Bank of America Merrill Lynch are global coordinators, with Banco do Brasil, BTG Pactual, Deutsche Bank and Santander as bookrunners.
Taesa Advances Equity Sale
Brazil’s Transmissora Alianca de Energia Eletrica (Taesa) is analyzing conditions for the public sale of additional shares, it says. The transmission unit of Cemig had previously been heard preparing such a deal and hiring BTG Pactual and Bank of America Merrill Lynch to manage. The transaction is expected to raise up to BRL2bn ($1.09bn).The follow-on sale would in many ways function as an IPO for the relatively illiquid shares. Cemig bought Taesa, then known as Terna Participacoes, in 2009 from Italy’s Terna, and has indicated it would look to increase the unit’s float. Taesa shares closed at BRL60.50 Thursday.
Corpbanca OKs $650m Raise
Shareholders of Chile’s Corpbanca have approved a $650m capital increase, in a needed step to finalize the December acquisition of Santander’s Colombia unit, Corpbanca says. The capital increase will result in the issuance of 48bn new shares that Corpbanca hopes to sell between May and June, an investor relations official says. Corpbanca plans to begin a road show in May and expect to have obtained the funds by the end of June. The capital increase comes as a prerequisite to finalizing the acquisition of Santander’s Colombia assets, first announced in early December. As agreed, Corpbanca is acquiring a 95% stake in of the Santander unit in Colombia for $1.16bn, a transaction with an implied multiple of roughly 2.7x book value.
Enersur Lands Captial Raise
Shareholders of Peru’s Enersur have subscribed to 99.39% of the shares offered in a PES401m ($151m) capital increase, the power generator says. The 24m shares came at PES16.50 each, during the first round of the process. A second round offering the remaining shares to the public is scheduled to open Thursday and close Monday. Enersur is controlled by France’s GDF Suez. Enersur shares closed at PES19.80 Tuesday.
JBS Assigns Vigor Valuation
JBS plans to offer shareholders a 1-for-1 share swap for shares of its Vigor unit, in a spinoff worth up to BRL1.19bn ($650m), it says. The meatpacker is planning to hold an IPO for the dairy asset, and has set the price for 149.7m Vigor shares at BRL7.96 each, based on the average share price of JBS stock over the past 20 trading days. It has not yet set a timetable for the operation. Bradesco is advising JBS in the process. JBS shares closed at BRL7.45 Tuesday.
Locamerica Adjusts IPO Timetable
Brazil’s Locamerica plans to price a BRL384m-BRL488m ($211m-$268m) IPO April 19, moving the date back one day from April 18, it says. The vehicle outsourcing provider is offering 18.2m primary shares, along with 12.2m secondary shares owned by Banco Votarntim’s BV Empreendimentos e Participacoes private equity fund, at BRL11-BRL14 each, it says. This would mean a BRL488m sale at the top of the range or BRL384m at the bottom, assuming a 15% greenshoe is used. A 20% hot issue is also available. A roadshow for the local and 144a sale began last week. Locamerica, which will use the symbol LCAM3, plans to use 60% of the proceeds for expanding its fleet and the remainder for working capital. Banco do Brasil, Banco Votorantim, Bank of America Merrill Lynch, BTG Pactual and Itau are managing the transaction. The April 19 date still has it on track to be the first Brazilian IPO of the year, slotting in ahead of BTG Pactual and Unicasa, both scheduled to price the following week.
Lupatech Inks Capitalization Deal with Shareholders
Troubled Brazilian oil services company Lupatech has finally agreed on a capitalization deal with its main shareholders, it says. Several weeks after announcing a BRL700m ($379.3m) capitalization plan, Brazilian development bank BNDES and Petros, the employee pension fund of Brazil’s oil company Petrobras, have agreed to put up BRL300m of the total capital sought. The remaining amount is to come from shareholders that will acquire additional 175m shares that Lupatech plans to issue at BRL4.00 a share. The price compares to the BRL4.56 previous closing. Lupatech shares closed at BRL 5.07 Monday. Officials at Lupatech could not immediately comment further. As part of the deal Lupatech will absorb the assets of San Antonio International, currently owned by GP Investments, which include drill rigs and well services divisions. Lupatech and GP have estimated an enterprise value of San Antonio Brasil at BRL150m, with BRL100m in debt and BRL50m in equity. The shareholders are also expected to revamp Lupatech’s administration. The company’s bonds were heard reaching levels of 70 late Monday, up from 58.
Redecard Valuation in Line with Itau Offer
The BRL35.88 per share independent valuation of Brazilian credit card processor Redecard is in line with Itau’s BRL35.00 offer made for the company in February, according to analysts. The finding by Rothschild, hired by minority Redecard holders, leaves little room for Itau to increase its offer price, Deutsche Bank says, calling it fair and recommending that minority holders accept. Citi and BR Partners are set to issue a fairness opinion on Rothschild’s valuation report, Deutsche says, which should be performed over the next 2 weeks. This would be followed by a final tender offer from Itau. “Whether or not Itau will be successful in the tender offer we think the above concerns mean that a large pricing power held by the controlling shareholder make it more difficult for minorities to argue for a better price in this negotiation,” Barclays says. Barclays expects the tender to take place and Itau to end up buying most of the Redecard free-float, if not all, even if it is less than the minimum two-thirds required to de-list Redecard. Itau has offered to purchase 336.4m Redecard shares, or 49.985% of the company, for BRL35.00 per share, with the intention to delist it. Itau is advising itself in the process.