Category: Equity

Banrisul, the Brazilian bank, has priced a $1.13bn equivalent IPO, in line with expectations. The bank sold 174m shares at BRL12 a share, versus a proposed range of BRL10.50-BRL13.50. The offering was through Credit Suisse and UBS-Pactual. Also Tuesday, an offering from Estacio Participações was scheduled to raise around $400m. Sole lead manager UBS-Pactual had announced a range of BRL32.50-BRL42.50.

IPO activity is churning over in Brazil, but Citi for one is not worried about indigestion. “There is little evidence that new issuance activity in the Brazilian equity market has created too much supply. On average, investors in new issues have seen gains of 40% over the lives of the new issues, compared to a gain in the Bovespa of “only” 25% over the same period,” says Citi in a report issued Tuesday. It adds that besides July issues, just two IPOs of the past year are below issue price. In the past 12 months, Brazilian companies have raised $18.6bn in 54 deals and Citi says the pace is accelerating. Flow is still dominated by real estate and construction, accounting for 21 of the 54 deals in the past year, raising $6.3bn. “IPO performance in the Real Estate/Construction sector has improved markedly. On average, these new issues have risen 47% in the past year, a 21% outperformance of the Bovespa,” says Citi. The best performers by sector have been Mining and Telecoms, with only one issue each. The only sector where IPOs have underperformed is renewable energy. The note was presumably written before the Bovespa took a beating Tuesday, closing down 3.86% at 55,794.

IPOs from two mid-cap banks and an educational company were expected to hit the market early this week in Brazil. Banco ABC is expected to bring a $365m IPO via UBS-Pactual and Itaú BBA Tuesday, according to Dealogic. The price range was BRL11.50-BRL15.50. Banrisul is also expected to bring as early as today an estimated $1bn offering via Credit Suisse and UBS-Pactual at a proposed range of BRL10.50-BRL13.50. Also Tuesday, an offering from Estacio Participações is expected to raise around $400m. Sole lead manager UBS-Pactual has announced a range of BRL32.50-BRL42.50.

Mexican communications company Maxcom is expected to announce details on its IPO imminently, according to Dealogic. The company has hired Ixe Casa de Bolsa and Morgan Stanley to help it offer shares worth up to $175m both in Mexico and in the US, the data firm says. The company is fighting to restore a tarnished image with investors. José Antonio Solbes, Maxcom’s CFO, insists the company did not default on $300mn in 13.75% of 2007 notes issued in 2000. But he battles a widespread perception that it did.

Brazilian sugar and ethanol producer Acucar Guarani priced Friday a $360m equivalent BRL IPO through UBS Pactual. The initial range was BRL13.50-BRL17.50 and the deal came at BRL13.50, according to Dealogic. The data provider also showed the offer smaller than the $412m-$474m initially expected, and a day late. Gross fees were $13.53m. Bradesco and Calyon were co-managers. The Bovespa closed 1.17% lower Friday amid losses in global stock markets.

Brazilian companies were busy at the end of last week, raising over BRL2bn ($1bn) between them from IPOs. Real estate company MRV Engenharia, bagged BRL1.06bn from the sale of 40.8m shares at BRL26 apiece, at the top of the price guide. UBS led. Kroton Educacional, a privately held school operator, sold 10.6m shares at BRL39 via Morgan Stanley and Merrill Lynch to raise $416m. Triunfo Participacoes & Investimentos, a highway and harbor operator brought in BRL513m by selling 54m shares at BRL9.5 each via Credit Suisse. Textile manufacturer Cia Hering, meanwhile, sold 28.3m shares at BRL11.00 for BRL312m. Banco Itaú led. So far this year, Brazilian companies have already surpassed the total raised via share offerings on Bovespa last year: 39 companies have raised BRL36.4bn against BRL31.3bn from 26 IPOs last year.

Chilean salmon producer Multiexport Foods is seeking to raise up to $100m on Thursday when it floats around 15% of its stock on the local Santiago Stock Exchange. The offering, coordinated by local broker LarrainVial, aims to sell around 178m shares. The planned IPO will make Multiexport the second Chilean salmon producer to float its stock locally, joining Invermar, which went public in 2005 raising $22m.

Expected today in the IPO boom are Argentina’s Banco Patagonia and Brazilian beef producer Minerva. The latter is looking to raise up to $264m equivalent from the sale of ordinary shares in a BRL15.50-BRL21.50 range through Credit Suisse and Itaú, according to Dealogic. Patagonia is meanwhile scheduled to place just under $310m equivalent in a dual exchange issue through JPMorgan. Some $260m will be in Argentina and the rest in Brazil for retail. All are in Argentine pesos, according to Dealogic. Co-managers on Patagonia are Mercado de Valores de Buenos Aires and Patagonia Valores Sociedad de Bolsa.

Maple Energy, the Peruvian power firm, priced Friday a $55m equivalent IPO on London’s AIM, says Dealogic. Canaccord Adams and Mirabud were the leads, with Banco de Credito del Peru as co-manager. It sold 32.6m shares at 84p each. Maple is a diversified energy company with oil and gas assets.

Brazil’s Redecard IPO surged 27% on its first day of trading with volumes that eclipsed other Brazilian bluechips, according to a Bradesco BBI report. While CVRD, Petrobras and Bradesco saw daily volumes at BRL425m, BRL398m, and BRL192m, trading activity for Redecard clocked in at BRL1.54bn, more than three times CVRD. Unibanco, Itaú BBA and Citi led Redecard.