Colombia’s finance ministry has raised the price it is seeking for its 57.7% stake in generator Isagen, Isagen says, to COP3,178 per share from COP2,850. At the new price level, the government’s stake would be worth about COP4.99trn ($2.63bn), up from a previous COP4.48trn value. Colombians Grupo Argos and EEB have indicated plans to bid for the stake, and foreigners Duke Energy and GDF Suez are also interested, according to remarks earlier this year from Colombian officials. Last month, Moody’s lowered the outlook on Isagen’s Baa3 rating to negative, on a loss of government support. It also notes a legal challenge to the sale process led by former Colombian president Alvaro Uribe. The sale is expected to be complete early next year.
Category: M&A
Posted inDaily Brief
Ultrapar Enters Pharmacy Business
Brazilian fuel and petrochemicals company Ultrapar Participacoes has agreed to acquire Imifarma Produtos Farmaceuticos for BRL1.01bn ($455m), it says, providing an entrance into the pharmaceutical products sector. The transaction includes Ultrapar assuming BRL106m in debt, and paying the remainder via 16.03m of its shares, equal 2.9% of Ultrapar. The buyer hopes to sell Imifarma’s Extrapharma brand products at its service stations, it says. The target has 186 retail locations in the Northern and Northeastern regions of Brazil, and is expected to book BRL70m in Ebitda this year. Imifarma controller Paulo Lazera is to become a member of Ultrapar’s board and will remain in control of the pharmacy retail business. Ultrapar expects the transaction to close early next year, following necessary approvals.
Posted inDaily Brief
Rubiales Pays Up for Synergies
Pacific Rubiales has agreed to buy Petrominerales for CAD1.58bn ($1.53bn), in a combination of assets that analysts see as beneficial even if coming at a cost. Rubiales is to pay CAD935m and take on CAD640m debt, the two Colombian E&P operators say. Petrominerales shareholders will receive CAD11.00 per share and one share in a newly formed entity to hold Brazilian assets and receive a CAD100m cash capitalization. The level represents a 42% premium to the CAD7.74 closing price in the previous session. The value represents about 40x reserves, Jose Dario Lozano, director of equity research at Alianza Valores, tells LatinFinance, compared to the 20x at which many large oil companies trade. “It’s difficult to know if it is expensive in the long run or not. You need to analyze not only the reserves, but also the cost savings and the value of the pipelines [included in the deal],” Lozano says. “The effect of the transaction in the short term could be negative, as the premium Pacific Rubiales paid is high. However, the acquisition is strategic and could benefit the company long-term,” Serfinco says in a report. Rubiales plans to fund the deal with cash on hand and a $1.3bn committed bank loan to be refinanced following the close. The buyer plans to pay down some of the debt by selling all or part of Petrominerales’ stakes in pipelines, and retaining access through leasing contracts. In calling the deal “credit neutral,” Fitch expects it will marginally increase Rubiales’ leverage – to 1.2x from 0.7x at year end 2012 – and somewhat increase its production diversification. In aggregate, Rubiales gains 18 Colombian blocks, four Peruvian blocks, a 5% equity interest in the Oleoducto Central pipeline and a 9.65% stake in the Oleoducto Bicentenario de Colombia pipeline. The transaction awaits approval from regulators and Petrominerales shareholders. Bank of America advised Pacific Rubiales, and TD Securities advised Petrominerales. Petrominerales shares closed at CAD11.70 Monday.
Posted inDaily Brief
Maxcom Offer Reaches 44%
A group of investors led by Mexican private equity firm Ventura Capital Privado has acquired 44.7% of the shares of telecom Maxcom’s outstanding shares following the close of a public offer, it says. Ventura Capital last month offered up to $60m to buy the whole company, as part of Maxcom’s restructuring process. A US court approved this month a prepackaged bankruptcy plan for Maxcom, which provides business and residential phone along with pay TV and other services. Lazard has been advising Maxcom.
Posted inDaily Brief
MMX Hawks More Assets
MMX Mineracao e Metalicos is putting another asset up for sale, the Eike Batista company says. The miner is negotiating the sale of the assets and mining rights of MMX Corumba Mineracao in the state of Mato Grosso do Sul to Vetria Mineracao, which is controlled by rail operator ALL. MMX is also in exclusive talks this month with Trafigura and Mubadala to sell control of the iron ore port near Rio de Janeiro. Under preliminary agreements announced earlier this month, Trafigura and Mubadala would buy $400m of new stock in the MMX Porto Sudeste subsidiary, and come away with a 65% stake.
Posted inMagazine
Colombia’s banks: Foreign affairs
Colombia’s largest financial institutions are on an acquisition spree in Central America. With tough regulations at home, the diversification is welcome
Posted inMagazine
M&A News: Cola wars
Latin America’s Coca-Cola bottlers tussle over the Brazilian market while elsewhere telecom acquisitions heat up
Posted inDaily Brief
ILC Takes Control of CorpGroup Insurer
Inversiones La Construccion (ILC), the investment arm of non-profit Camara Chilena de la Construccion, has agreed to pay CLP84.5bn ($170m) to acquire 67% of insurer Corp Group Vida Chile from Chilean financial group CorpGroup, it says in a regulatory document. The deal is expected to close before November 30. ILC is a holdco for health and health insurance firms.
Posted inDaily Brief
America Movil Club Identities Emerge
America Movil’s bridge lending group supporting its KPN purchase includes Deutsche Bank, BBVA, Bank of Tokyo Mitsubishi, Indesa and Mizuho, according to people familiar with the transaction. The 1-year, EUR7.2bn ($9.7bn) bridge loan was put in place at the end of August supports the Mexican telecom’s EUR7.2bn bid for Royal KPN. The status of the deal remains unclear, after the Dutch phone company’s foundation exercised an option to buy shares with the intention of impeding the offer. Deutsche Bank is advising America Movil on the process.
Posted inDaily Brief
Usiminas to Get Japanese Capital
Sunitomo has agreed to give Mineracao Usiminas a $100m capital injection, the mining arm of Brazilian steelmaker Usiminas says. In exchange, Usiminas is to give the Japanese conglomerate a piece of land, which will be placed in the pair’s Musa joint venture. “With the transfer, Musa will hold a strategic asset, next to other port terminals in Itaguai’s Sepetiba bay, to serve as backyard for iron ore handling and storage,” Usiminas says.