Brazilian builder BR Properties has agreed to sell all its 34 industrial and logistics properties to WTGoodman for BRL3.18bn ($1.38bn), in a bid to cut leverage and increase returns to shareholders. BR Properties’ net debt equaled 5.2x adjusted Ebitda at the end of the third quarter, down from 7.3x a year earlier. As well as further trimming leverage, the firm plans to use the proceeds for a share buyback program, and for dividend payments. The deal demonstrates an “aggressive stance” by management to optimize the company’s valuation, Citi analyst Dan McGoey says in a client note. Brazilian pension fund manger Petros bought a 10% stake in BR Properties earlier this month. WTGoodman is a joint venture between Brazilian real estate developer WTorre and Australian property group Goodman. The deal is subject to regulatory approval.
Category: M&A
Grana Takes TGP Stake with Canadian Backing
Peruvian construction firm Grana y Montero had agreed to buy a 12.38% stake in natural gas distributor Transportadora de Gas del Peru for $237m from Pluspetrol Resources, it says. The Canada Pension Plan Investment Board has extended a loan to the builder to fund the acquisition. Grana y Montero announced an agreement with the Canadian pension manager earlier in the month to invest together in Latin American infrastructure projects. The construction firm listed on the NYSE in July, raising $474m through the equity follow-on.
Harvest to Unload Vene Assets
Harvest Natural Resources has received a $400m offer for its 32% stake in Venezuela’s Petrodelta from Argentina’s Pluspetrol, it says. In the deal, Harvest would sell its 80% interest in Harvest-Vinccler Dutch Holding (HVDH). Harvest would sell 29% of HVDH immediately for $125m, and sell the remaining 51% for $275m during 1H2014. The US E&P operator plans to use proceeds to pay off long-term debt and for working capital. The deal is subject to the negotiation of definitive agreements between the two firms, as well as approval from stockholders and the Venezuelan government.
Isagen Sale to Trickle Open
Colombia’s government will officially open the sale of its 57.66% stake in power generator Isagen today, it says, though the main portion of the sale in which a major domestic or international player might take control is likely to wait until next year. The initial phase opening today and running through January 20 offers up to 6% of the company to former or current Isagen workers, unions, union federations, pension funds, unemployment funds and family compensation funds, as required by law. The remaining portion would be sold in another offer following that period. The government is seeking COP4.99trn ($2.6bn) in total, offering 1.57bn shares at the previously announced price of COP3,178 each. Interested bidders include Colombians Grupo Argos and EEB, and foreigners Duke Energy and GDF Suez. A legal challenge to the sale process led by former Colombian president Alvaro Uribe is still in the process of being mounted.
Malaysians Back Off OGX Deal
Malaysia’s Petroliam Nasional (Petronas) has has backed out of an $850m agreement to buy a stake in one of OGX’s oil fields, OGX says. OGX is considering its legal options. OGX had agreed in May to sell a 40% stake in the blocks in the Tubarao Martelo field to Petronas, and the buyer in August indicated it was reluctant to complete the deal. OGX filed last month for bankruptcy protection.
Swiss Re Buys Brazilian Stake
Swiss Re has agreed to buy shares representing a 14.9% stake in Brazilian insurer SulAmerica for $334m, it says. It is buying 33.7m units from ING, which has been decreasing its position in SulAmerica, representing $250m of the total, and 13.1m units from the controlling Larragoiti family. A unit holds one ordinary and two preferred shares. Once the two transactions are completed, ING will hold 17.1% of SulAmerica and the Larragoitis 20.9%. ING agreed to sell 26.5m units to IFC in May. Sul America units closed at BRL15.95 ($6.90) Monday.
Fibria Raises $600m
Brazil’s Fibria Celulose has agreed to sell a package of land to Parkia Participacoes, raising BRL1.4bn ($606m), it says. In the deal involving 210,000 hectares in four Brazilian states, the pulp producer can earn an additional BRL205m over the next 21 years if the land increases in value. Fibria will continue to operate in those areas in the states of Sao Paulo, Mato Grosso do Sul, Bahia and Espirito Santo under a 24-year contract yet to be signed with Parkia. The deal is the latest in a series of asset sales, which along with several liability management exercises in the capital markets, have helped Fibria improve its debt profile and improve its credit rating since the crisis.
Bridge in Hand, CFR Makes Adcock Bid
Chile’s CFR Pharmaceuticals has formally bid ZAR12.6bn ($1.2bn) for South African drug maker Adcock Ingram, and has secured a $600m bridge loan to help, it says. CFR has support of shareholders holding 45% of Adcock, and claims letters of support from another 7.5%. It needs to reach 75% for success, and a pension fund holding 19% has come out against the deal. It would pay cash for 51.0%-64.2% of Adcock, and settle the rest with new CFR shares. The ZAR73.51 per share offer price represents a premium to Friday’s ZAR69.30 close. CFR says it has a $600m bridge loan ready to go from BBVA, Santander Chile, Bancolombia and Bank of America. Credit Suisse is advising CFR, with IMTrust providing an evaluation of Adcock shares. Deutsche Bank is advising Adcock, with JPMorgan providing a fairness opinion. The deal is expected to generate revenue and cost synergies of up to $440m, would see Adcock delisted from Johannesburg, where CFR would have a secondary listing. In addition to the bridge funds, CFR is preparing a $750m equity capital raise.
Fleury Controller Looks for Alternatives
Core Participacoes, which controls Brazil’s Fleury, plans to look for “strategic alternatives” for its 47% stake in the healthcare services group. The process could involve bringing in new investors. JPMorgan has been hired to advise. Core’s stake is held through the Integritas entity, of which it owns 74% and a division of Bradesco the remainder.
Mexican Moves for Telecom Argentina
Mexican investor Fintech has agreed to buy a 22.7% stake in Telecom Argentina from Telecom Italia for $960m, Telecom Italia says. In the deal, Fintech is buying shares held by the Sofora Telecomunicaciones, Nortel Inversora and Tierra Argentea entities. The Mexican shop owned by businessman David Martinez also plans to launch a tender for the remaining shares of Telecom Argentina and of Nortel, as required by law. The transaction is subject to regulatory approvals. Barclays provided a Fairness opinion to the target, according to Dealogic data.