Category: Equity

Emdersa, an Argentine power distribution company, will look to price an IPO today in Buenos Aires, Luxembourg and New York, but it is facing an increasingly discerning investor base, which may diminish the valuation. Late last week, the company said it wanted to price155.6m ordinary class B shares at ARS3.70-ARS4.40 and global depository shares at $11.75-$13.97. Wary of skewed economic data and heavy-handed government intervention in the economy, investors have punished Argentine assets harder than most other LatAm countries. In addition, the deal, which is relatively small in size, includes secondary share sales by private equity investors such as JPMorgan Overseas Capital, GPU Argentina Holdings, Whitewater EMCO and EMCF, and D.E. Shaw Laminar Emerging Markets. JPMorgan and Merrill Lynch are leading the offer.

Brazil’s commodities and futures exchange, the BM&F, followed in the footsteps of the Bovespa Tuesday with a blowout IPO, which was heard more than 10x oversubscribed. The deal came at BRL20.00, at the top of a revised BRL18.00-BRL20.00 range, and a 23% upwards revision from the initial BRL14.50-BRL16.50 band. At that price, the BM&F will raise $3.3bn assuming the over allotment option is exercised, which is substantially higher than the $2.6bn it would have raised at the midpoint of its initial range. BM&F is expected to announce the final pricing on the sale of 299m shares today Bankers familiar with the deal say investor price sensitivity was very low, even after the increased range, which suggests the shares could see an aftermarket pop. The Bovespa, which went public last month in a similarly sized offering, saw its shares surge as much as 50% in the first day of trading, something the BM&F would like to avoid, say bankers. Lead managers include Morgan Stanley, BBI, Merrill Lynch, Itau BBA, Deutsche Bank and Citi, according to Dealogic. The deal comes in stark contrast to the recent failures of less liquid Brazilian equity issuers.

Shares of Ecopetrol, the Colombian oil producer, began trading locally Tuesday, but few actually changed hands. Strong demand for the paper fuelled big jumps in the stock price which triggered safety mechanisms in the bolsa that halted trading twice, the second time for good. Shares began trading at 9:00am at COP1,400 but were immediately bid up to the 10% threshold of COP1,540, which prompted the first shutdown. After half an hour, trading resumed and shares leapt another 10% to COP1,694, which triggered a second shutdown, thereby halting trading for the rest of the day. Ecopetrol is set to open today’s session at COP1,694, up 20% from IPO. Local brokers tell LatinFinance it is likely they will reach COP1,863 and get shut down again. Valores Bancolombia launched its coverage of Ecopetrol yesterday with a 2008 year-end estimate of COP2,390. The company debuted in September locally to great acclaim, generating orders over $3bn, more than double original estimates.

Guatemala’s Banco Industrial is heard to be preparing an IPO in Mexico, marking a first for a Central American issuer and a possible return to relevance for the Mexican bourse. Industrial has been a regional consolidator, most recently acquiring Banco Quetzal for $3.92bn in August. The bank has the broadest geographic and demographic coverage in Guatemala, and is seeking out acquisitions beyond its borders, Luis Prado, vp and international division manager, told LatinFinance earlier this month. Credit Suisse is rumored to have the IPO mandate.

Brazil’s Banco Panamericano succeeded in pricing an IPO Tuesday, but raised 28% less than it had originally hoped for. The offering was slated to come at BRL12.50-BRL15.00, but it ended up coming at just BRL10.00. This resulted in a maximum raise of $443m assuming a full exercising of the over allotment option, versus $610m if the deal had come at the midpoint. IPO investors have been particularly cautious when it comes to real estate and mid-cap banks, since oversupply from each sector has caused deal fatigue. The buyside is particularly wary of new names and illiquidity. UBS Pactual, Itaú BBA and BBI had books on the sale. Panamericano is the 10th IPO led by UBS to price below the range this year, according to Dealogic.

Following on the heels of a blowout Bovespa IPO, BM&F launched Friday its equity offer. The sale of 230m common shares for the Brazilian futures and commodity exchange has a price range of BRL14.6-BRL16.5 and is expected to raise over $2.3bn. JPMorgan, Merrill Lynch and Morgan Stanley are global coordinators and Bradesco and Itau are working as bookrunners on the local side. Pricing is lined up for November 28. If it comes at the mid-point, it will price at 34.5x 2008 earnings, according to a banker on the 144a deal. The Bovespa IPO is trading 40% higher than where it launched.

Moody’s has put Maxcom Telecomunicaciones’ B3 corporate family rating under review for possible upgrade due to better operating results and credit metrics following its IPO. The $242m proceeds from the float will be used to boost capital expenditures for the company’s growth strategy, which involves expanding its network to offer wire line telephony, data and video services to the medium and low income residential segment as well as to small and medium sized enterprises. The Mexican telecom has $200m in 11% of 2014 senior unsecured global notes. In the 12 months ending September 30, Maxcom posted revenues of approximately $200m with a 32% adjusted Ebitda margin, says Moody’s.

Mexican cable and broadcasting company Megacable priced its IPO late Tuesday at MXP34.50, above the MXP27.00-MXP33.00 filing range, which raised a $555m for the issuer. The book was heard several times oversubscribed, with 20% of it going to Mexican investors and 80% to international investors. Within the international group, 80% went to US investors, 30% European and 10% other countries, with a significant Brazilian participation, say bankers close to the deal. Megacable is the fourth Mexican IPO this year, according to Dealogic, following Findep and Maxcom, which came in October, and Compartamos, which came in April. JPMorgan had books on the offering, with several local shops assisting in distribution.