Lojas Americanas plans to put at least BRL566m into its B2W unit through B2W’s private share subscription, B2W says. Online retailer B2W plans to raise BRL1bn through the sale of 46.3m shares at BRL21.20 each in an offer to existing holders Between March 28 and April 26. Americanas plans to subscribe to an amount proportionate to its 56.57% stake, plus buy any remaining shares after the offer closes. The proceeds will be used to make investments, B2W says. B2W shares closed Thursday at BRL22.38.
Category: Equity
Posted inDaily Brief
T4F Sets IPO Date
T4F Entretenimento plans to sell 11.7m primary shares and 17.6m secondary shares at BRL14.50-BRL18.50 each in an IPO scheduled for April 7. Such a deal would bring BRL483m at the BRL16.50 midpoint. A 15% greenshoe is also possible, which would bring the total to BRL623m if priced at the top of the range. The event promoter and ticket broker has operations in Brazil, Chile and Argentina. Controlling shareholder and CEO Fernando Luiz Alterio, Mexican entertainment operator CIE Internacional, and Gavea Investimentos’ GIF II fund are selling shares in the secondary portion. The issuer began investor meetings Thursday. T4F, which stands for “Time for Fun,” booked BRL95.1m in Ebitda in 2010, up from BRL46.1m in 2009. BTG, Bradesco and Credit Suisse are managing the sale. Despite a large pipeline, Brazilian IPO launches after the carnival break have been slow in coming. Cimentos Liz is now marketing and scheduled to test the waters March 31, for perhaps BRL500m.
Posted inDaily Brief
LatAm Equities on Outflow Streak
LatAm equity funds extended their outflow streak to 9 consecutive weeks, losing about $500m in the week ended March 16, say EPFR Global and Barclays. EPFR blames fears that Japan’s tragedy and higher oil prices could sap demand for exports. EM equities suffered outflows of $2.3bn, according to EPFR. It adds that doubts about the strength of global economic growth, fears that many central banks remain behind the curve when it comes to containing inflation, and the recent spike in risk aversion all took their toll. Performance was negative for the week ended March 17, according to Lipper, with LatAm equities falling 1.56% in the week and 8.63% year-to-date. EM funds fell 1.82% in the week and 6.28% ytd and global small and mid-cap funds fell 2.26% in the week and are down by the same amount ytd.
Posted inDaily Brief
Analysts Like WTorre, BTG Deal
Equity analysts approve of BTG’s acquisition of around 70% of WTorre’s property portfolio. “I see it as a win-win,” says one Sao Paulo-based equity analyst covering the property development sector. “Walter Torre was really out of luck with the IPO. The company was really leveraged.” BTG is said to be acquiring the assets for BRL1.8bn, and assuming BRL1.7bn in debt. According to local press reports, BTG will form a new vehicle consisting of the majority of WTorre’s property assets, which it values at around BRL5.3bn. According to a report in Valor Economico, the deal will consists of a 50% stake in its Ventura property, a 40% stake in the Brookfield property, two towers of the JK Complex, undeveloped land in Marginal Pinheiros, a project in Porto Maravilha, the Petrobras headquarters, 50% of a commercial building in Martinal Pinheiros, and several other buildings. “The outcome for WTorre was just as good as it was for BTG. And obviously BTG was able to get a valuation much lower than Walter Torre had in mind at the time of the IPO,” the analyst says. WTorre had filed for an IPO in March 2010 in Brazil’s domestic market through Bank of America Merrill Lynch, BTG Pactual and Itau. The developer eventually pulled the IPO citing poor market conditions. Analysts were uncertain how to value the portfolio, since some of the buildings have yet to be completed. The undeveloped land in Marginal Pinheiros, for example, could have wildly different values depending on how it is developed. Still, most analysts were positive on the deal. When asked if the portfolio would indeed be worth the BRL5.3bn that has been suggested, another Sao Paulo-based equity analyst covering the sector says it is likely. “It is very very possible,” the analyst says. Most of the buildings named in the deal are AAA rated buildings. “He was looking for a partnership to develop his projects,” says the analyst. The analysts were unable to calculate a valuation multiple for the BTG deal since WTorre does not
Posted inDaily Brief
Cemex Adds Convert Overallotments
Cemex has raised a total of $1.67bn from its March 9 convertible bond sale, after exercising the overallotment options on the deal to increase from the original $1.4bn. The sale allowed the Mexican cement maker to meet a stipulation in its 2009 loan refinancing to raise at least $1bn in equity by year-end 2011. It originally sold an $800m 3.25% of 2016 tranche and a $600m 3.75% of 2018 tranche. Both parts come with a 30.0% conversion premium, and are convertible at maturity. Citi and JPMorgan were active bookrunners, with BAML, Barclays, BBVA, BNP Paribas, HSBC, ING, RBS, and Santander running passive books.
Posted inDaily Brief
EMX Closes CCD Fund
Mexican private equity shop EMX Capital closed its local certificados de capital de desarrollo (CCD) fund with $127m equivalent on March 3, says managing partner Joaquin Avila. The firm’s multi-sector fund will make average equity investments of $20m-$30m per project in Mexico. The fund is managed by former Carlyle Mexico investment team composed of Joaquin Avila, Rodrigo Fonseca, Miguel Valenzuela and Andres Obregon. This is EMX’s first fund.
Posted inDaily Brief
Santander Argentina to Issue Shares
Shareholders of Santander Rio have approved of the issuance of 145m new shares, the Argentine unit of the Spanish bank says. It does not give details about the nature of the transaction, though the market has been expecting the bank to hold a public follow-on to increase its free float. The bank says it would price the class B shares in the range of ARP10 to ARP26, indicating an ARP1.45bn-ARP3.77bn ($359m-$934m) total size. The shares closed at ARP14.00 Thursday, which would indicate an ARP2.00bn deal. The bank does not give an indication of the timing of the transaction.
Posted inDaily Brief
More IPOs in 2011: Peru Bolsa
Peru’s stock exchange should see 3-6 IPOs this year, its CEO says. “This year we expect a larger number of IPOs,” Francis Stenning tells LatinFinance. Last year saw just one, fishery operator Exalmar, but Stenning says two factors support more issuance in 2011. Economic growth in Peru has been exceptional over the last few years, and this is now translating into small and medium-size companies needing growth funds. Interest rates are also rising this year from historic lows last year that made debt funding very attractive, and this year more companies should opt for equity. The integration with the Santiago and Bogota bolsas should also help by encouraging liquidity. This process should be finalized around May 1, Stenning says, with an official announcement of the date coming soon. After the tie up, the next project on the stock exchange’s agenda is to proceed with the merger with Bogota’s exchange. A letter of intent was signed in January, with shareholder approval expected by the end of this month.
Posted inDaily Brief
Retail Sector Slows in Chile
Chile’s red-hot retail sector is beginning to slowdown from breakneck growth last year. “This year we should see same-store sales increase about 10% for the majority of Chilean retailers that operate department stores,” says Felix Lorenzo, portfolio manager and Chile country head at LarrainVial’s asset management unit. “This is a good rate of growth, but it is below that seen in 2010, when growth was around 15%-20%,” he adds. While stocks are also seen to be rising, the sequel to last year’s surge is not predicted to be a blockbuster. “In 2011, we should see sector stocks appreciate about 15% overall, in line with historical trends, but much mower than the 83% increase [seen in 2010],” Lorenzo explains. “These are actually decent investments over the long term, but they have had quite a run up in the past couple of years and are not cheap anymore,” says Nick Robinson, a Sao Paulo-based director with Aberdeen Asset Management’s EM team. The frothiness in the valuations of large cap retailers last year drew investor scrutiny of multiples. “Some retailers in Chile [are trading at] multiples of about 30 times earnings. Concosud is in that region and Falabella is not far behind that,” Robinson explains. “Normally, you don’t want to be paying more than 20-25 times earnings. That is the most we would pay for a retailer.”
Posted inDaily Brief
Sudamericana de Vapores Plans Equity Raise
Compania Sudamericana de Vapores plans to increase its equity capital by up to $500m equivalent, it says, through the issue of new shares. The Chilean shipping company is scheduled to put the matter to a shareholder vote at a meeting April 8. The details and timing of the raise would then be determined by the company, it says.