Category: Equity

Brazilian real estate company Helbor Empreendimentos has obtained a BRL700m credit line from Banco Bradesco. The developer, which raised BRL232m in an October IPO, did not provide additional details. The credit will increase capacity to finance developments.

Le Lis Blanc Deux, a Brazilian manufacturer of high-end clothing, launched Monday a roadshow for an IPO expected to raise around $180m. The presentations began in Sao Paulo, and will move to Europe and the US. Le Lis Blanc Deux hopes to sell 26m shares at BRL10.50-BRL12.50 a share. The IPO is surprisingly small, but the issuer apparently wanted to press ahead with the deal and test the waters, say executives close to the process. Small IPOs have fared poorly in recent memory, as investors have demonstrated a strong aversion to low-liquidity stocks. Le Lis Blanc Deux may end up being the third IPO of the year for LatAm. The first was Nutriplant, which debuted on the Bovespa’s small cap index with an $11m IPO. The second may be Hypermarcas, the Brazilian retailer that is on the road with an IPO set to price next week. The company is looking to offer 36m shares at BRL20.50-BRL24.50. Merrill and Citi are leading Hypermarcas, while Merrill and Morgan Stanley have joint books on Le Lis Blanc Deux.

The merger between the Bovespa and the BM&F will be finalized by the end of June, setting the stage for a push into other LatAm markets, Manoel Felix Cintra Neto, the BM&F’s chairman, tells LatinFinance. The executive attributes the rapid integration process to deliberate preparations for the deal on both sides, prior to formal announcement of discussions. “We want to create a center for the liquidity in the region,” says Cintra, adding the idea is to compete on a global scale with other exchanges, such as the US, where a number of liquid LatAm companies are listed. Cintra avoids formulating the expansion as an acquisition spree, though the idea is by no means far fetched, given how other global exchanges have used mergers to gain scale and volume. The merged bourse will be the second largest in the Americas and the third largest in the world, beating the NYSE and Nasdaq in terms of market capitalization, according to Economatica. “We want companies to list themselves in several different places in the region,” says Cintra, noting investors in Chile and Mexico are interested in companies and derivatives products in Brazil, while Brazilian investors would like to invest directly in commodities and companies elsewhere.

Shares in Mexican cement giant Cemex sank Friday following the announcement that Chavez is nationalizing the cement industry in Venezuela, where Cemex has significant presence. Cemex’s ADR traded at $26.32 late Friday afternoon, down 4.22% from Thursday’s close of $27.48. On the Bolsa, Cemex was trading late afternoon at MXP27.81, down 3.94%. The Mexican IPC index was meanwhile off just 0.46%. The Venezuelan president says that he will pay “whatever it takes” to gain control of the cement industry in the country, according to press reports. Cemex was expecting for clarification from the Venezuelan authorities Friday. “We have not been informed of this by the Venezuelan government,” says a Cemex spokesman. “Given that, we are asking for an explanation.” The government blames cement companies for the domestic housing crisis, accusing them of exporting rather than supplying the domestic market, notes Goldman Sachs. The shop adds that the government has also in the past made threatening remarks about the steel and banking industries.

In a year where the thin trickle of ECM flow has been characterized by exceptional cases rather than the usual IPO and follow-on issuers, Citi, which finished in fourth place in 2007, is leading the ECM league tables with three deals and 30.16% of the underwritten deal volume, according to Dealogic. While that dominance is not expected to last very long, it indicates the shop has been busy printing deals to address a gaping hole in its 2007 LatAm franchise. Citi helped bring GP Investments’ $213m follow-on in February alongside Credit Suisse. It then underwrote its parent company’s divestiture of a stake in Brazil’s Redecard in mid-March, while its co-investors in the company chose not to sell. At $724m, that secondary offering is the largest deal to date. And a week later Citi helped Cresud raise $289m in a local rights offering in Argentina. Citi is also slated as co-lead on a $533m deal for Hypermarcas, alongside Merrill. “I don’t think they’ll still be there at the end of the first half,” says an ECM banker at a competing shop. “It’s all a question of when the market comes back,” he adds, noting once that happens, the usual suspects should regain their lead. Last year Credit Suisse and UBS Pactual led the charge by a wide margin, collecting 25% and 18% of the ECM fee pool respectively, according to Dealogic. But it may be awhile before those two regain their 2007 lead positions. A $2bn Gerdau offering scheduled for the last week of April should place JPMorgan and Itau, two other outliers, firmly at the top, with $1bn each in underwriting volume.

Cosan has asked the CVM to approve postponement of a planned share exchange to May 12 due to poor market conditions. The purpose of the transaction is to have holders of Cosan SA, the Bovespa-listed entity that went public in 2005, migrate to Cosan Ltd., the newer NYSE-listed entity whose voting stock is largely held by the company’s founder Rubens Ometto Mello. Investors have until May 2 to choose to adhere or not to the exchange offer. Cosan says in a statement that its shareholders requested a postponement due to volatility in the markets.

The Venezuelan government has reached an agreement with global hedge fund management group Renaissance Technologies to purchase 3.5m American Depositary Shares of quasi-sovereign Venezuelan telecom holding Cantv. The shares were valued at $11.27, according to the Venezuela state news agency, making the stake worth close to $40m. Terms of the transaction were not disclosed. According to the news agency, Venezuela is looking to purchase the remaining stocks outstanding. Trading of Cantv shares was suspended Tuesday on the local market to inform traders and stock holders of the purchase. Each ADS represents 7 class D shares of Cantv common stock, the Caracas exchange states. Renaissance manages $30bn in assets, according to its website. With this purchase, the Venezuelan government now controls 90% of the telecom, according to press reports.

Brazilian Insurance Provider Porto Seguro has approved a 2-for-1 share split. The split is effective March 29, and brings the total shares to 230.6m. Shares closed Friday at BRL53.20.

Brazil’s Hypermarcas expects to raise BRL733.9m-BRL877m through a local IPO, based on a price range of BRL20.50-BRL24.50. The company’s 35.8m shares are set to begin trading April 18. Proceeds will fund new acquisitions, new product development, and working capital. Citi and Merrill Lynch are managing the operation, with UBS Pactual as co-manger. The owner of several brands of food, cleaning, hygiene and medication products had filed for an IPO last year, but pulled the plug when it opted to sell a 25% stake to a group of Mexican investors for $250m.

Shares in the Bovespa and the BM&F surged on news of their merger Wednesday. Investors showed enthusiasm for the expected synergies and a strong growth outlook for both entities. “The BM&F has grown at higher rates than similar exchanges in other markets while the Bovespa’s growth has been not only higher than that seen in other countries, but at comparable levels to the growth rates of derivatives exchanges,” says Gilberto Mifano, the Bovespa’s CEO. A new holding company, provisionally called Bolsa Nova, will buy all the shares in both exchanges and issue new ones that will result in a 50-50 ownership. Bovespa holders will also get a cash payout of BRL1.24bn reais to adjust for the different shares outstanding in each company. Itau estimates goodwill of BRL16.4bn, which can be amortized over 6 years. The deal still needs to be approved by the CVM, the Central Bank, Brazil’s antitrust regulator and each side’s board and shareholders. A shareholder vote is expected for the week of April 7, say company officials, with a full conclusion to the voting process taking place by the end of April. A share swap, however, will only be done once a union is agreed.