Category: Equity

Investors with stakes in Santelisa Vale, Brazil’s second largest sugar and ethanol company, and that company’s executives, are plotting up to three IPOs for some of their holdings, people close to Santelisa tell LatinFinance. First up is likely to be an offering from the company formed by a merger between Renk Zanini and Cermatec, two agricultural equipment makers held by Santelisa Vale. Bradesco BBI and JPMorgan are heard to have bagged that mandate. Another possible IPO is for Santelisa Vale itself, today a 14,000 employee firm whose crushing capacity is second only to Cosan in Brazil. Third is another sugar and ethanol startup called CNAA, which, in addition to Santelisa, which holds a 28% stake, counts as its investors Carlyle Riverstone, Goldman Sachs, Merrill Lynch, Global Foods and Discovery Capital. Timing and mandates for the last two offerings are still far from being decided.

Bancolombia said Wednesday that it increased its stake in Banagricola to 98.90% by purchasing 9.59% of the Panamanian bank’s shares for $87.7m on the Panama Stock Exchange. Bancolombia paid $48.45 a share for the stake.

Cyrela Brazil Realty has filed to sell additional shares on the Bovespa, without indicating an amount or date. Credit Suisse will manage the sale. The developer also plans to sell BRL370m in 2018 debentures January 5 at a proposed rate of DI plus 65bp, to raise funds for expansion. S&P gave an AA- local rating to the deal to be led by Itau. Cyrela attempted to sell BRL500m in 10-year bonds internationally in June, but pulled the deal due to the liquidity crunch.

Brazilian healthcare company Tempo Participaçoes closed out this year’s LatAm equity season with a whimper, pricing its IPO at BRL7.00, well below the original midpoint of BRL9.25. The company sold 56.3m shares to raise BRL394m, 25% less than the BRL520m it might have raised at the original midpoint target. The underwriters have the option to buy an additional 8.4m shares which, if exercised, could raise the company another BRL59m. The pushback from investors on the valuation came as no surprise given how the past several IPOs of similar size have performed in Brazil. Investors have been wary of illiquid names and have demanded better pricing to compensate for the risk of holding a low-volume stock. UBS Pactual and Unibanco led the offering, with Santander and Agora Senior as co-managers. Tempo priced Monday.

IT investment company Ideiasnet has filed for additional shares on the Bovespa, without disclosing how much it expects to sell. The Rio de Janeiro-based company has 84m shares outstanding. It closed Monday at BRL7.50. Belo Horizonte-based Banco Bonsucesso has also filed for an IPO, without giving an amount. JPMorgan, an increasingly active participant in this market, will serve as bookrunner on both sales.

Brazilian power generation giant MPX priced its IPO Wednesday at BRL1,006.63, just below the midpoint of its BRL935.00-BRL1,111.00, raising BRL1.92bn. If the underwriters exercise the greenshoe, a likely outcome, the company will have raised BRL2.2bn in the offering – a grand start for a company with a track record of less than three years. The shares were placed with institutional investors only, and the book, which was heard over 2x oversubscribed, included a number of large US institutions that made up 60% of the buyer base. UBS Pactual, Merrill Lynch, Itau BBA and Santander joint-led the offering.

Puerto Rico’s Triple-S Management has priced a smaller than expected $200m IPO through Credit Suisse and UBS. The deal involved 14m shares of its Class B common stock, 5m of which was offered by Triple-S and 9m from selling stockholders, at a price of $14.50. Total net proceeds to Triple-S will be approximately $63.7m, after deducting underwriting discounts and commissions and estimated offering expenses. It will not receive any proceeds from the sale from selling stockholders. According to Dealogic, a size of $238m was being targeted. The underwriters have been granted a 30-day option to purchase up to an additional 2.1m shares of Class B common stock, 286,809 from Triple-S and 1.8m from selling stockholders. CIBC, Citi, Popular and Santander were co-managers. Triple-S Management Corporation is an independent licensee of the Blue Cross Blue Shield Association.

Banco de Credito, a Bogota-based bank and financial institution, raised $113m equivalent in an IPO priced Wednesday and finalized Thursday. Demand for the shares was heard at over 2x, with locals making up the entire book. “It’s a new company in the financial sector in Colombia, which gives investors an opportunity to diversify their holdings,” says Juan Nicolas Pardo Ayala, an analyst at local brokerage Valores Bancolombia. The company 565m shares Wednesday and 28m Thursday at COP407 apiece, leaving it with roughly one third of the float in public hands. Helms Securities, the Florida based parent of the company, led the deal.

Argentine power distributor Emdersa pushed its IPO through hostile market conditions Wednesday, but it was forced to settle for just $60m, around 30% of the amount originally targeted. Moreover, the selling shareholders, a number of equity funds that had bought into the company over the past few years, had to sit out the offering. Emdersa sold 55m primary shares at ARP3.45 per share, according to an executive close to the process. In the last week of November, Emdersa said it was targeting an offering of 156m shares, of which 62m were secondary shares, at a midpoint of ARP4.05, which would have resulted in a $200m raise. Instead it raised only $60m by selling new shares only. Shareholders GPU Argentina Holdings, JPMorgan Overseas Capital, Whitewater EMCO & EMCF, and D.E. Shaw Laminar Emerging Markets will have to wait for a better opportunity to sell down their stakes. Emdersa is controlled by a unit of JPMorgan, which managed the sale along with Merrill Lynch.

Shares of BM&F, Brazil’s mercantile and futures exchange, jumped 22% to BRL24.40 in the first day of trade. The surge was small compared to the first day for the Bovespa, which popped 52%. The BM&F’s underwriters claim there was a deliberate strategy to avoid such a leap by distributing the stock more broadly and jacking up the price range a day before books closed. With the green shoe, the company will have raised $3.3bn in the year’s second largest IPO, second only to the Bovespa’s $3.7bn. Ecopetrol’s $2.8bn deal and Redecard’s $2.4bn were the region’s two other largest deals this year. Leading the BM&F were JPMorgan, BBI, Morgan Stanley, Merrill Lynch, Itau BBA, Deutsche Bank and Citi.