Spain’s CaixaBank has agreed to sell 3.7% of Grupo Financiero Inbursa to Inmobiliaria Carso for EUR387m ($512m), it says, leaving another 6.4% to be sold through the public follow-on it is preparing. The Spanish bank books a capital gain of EUR33m from the sale back to Carso, which, like Inbursa, is controlled by Carlos Slim. Up next is the all-secondary share follow-on, where Caixa expects to sell 423m shares, with a price to be set through a bookbuild. It would raise MXP12.65bn ($989m) if done at the MXP26.00 per share price used in Friday’s transaction, assuming a 15% greenshoe, or MXP13.82bn if done at Friday’s MXP28.41 closing price. Pricing is expected this month, according to people following the sale. After the follow-on, Caixa expects to hold 9%-10% in the Mexican bank. Credit Suisse, Inbursa and UBS have been hired as global coordinators, with BTG Pactual as bookrunner on the international portion of the sale and Citi and BBVA joining on the Mexican portion. Caixa is raising funds to boost its Tier 1 capital.
Category: M&A
Gafisa Sells Control of Alphaville
Brazilian homebuilder Gafisa has agreed to sell a 70% stake of its Alphaville unit to private equity firms Blackstone Real Estate Advisors and Patria Investimentos for BRL1.41bn ($660m), it says, opting for a sale instead of an IPO. The amount is based on a total valuation for the high-end residential developer of BRL2.01bn. Blackstone and Patria will maintain the existing Alphaville management team, led by Marcelo Willer, and Gafisa will have two out of six seats on the board. To complete the sale to the pair of private equity buyers, Gafisa entered into an agreement with Alphaville’s founding partners to complete the purchase of the 20% stake in Alphaville it didn’t own, for BRL367m. The moves come after a strategic analysis for the Alphaville business, initiated in September 2012, in which an IPO was considered. Closing is expected in the second half of the year. Rothschild advised Gafisa on the deal.
Cemig Looking at Petrobras Hydro
Brazil’s Cemig has expressed interest in buying a controlling stake in the Brasil PCH hydroelectric generation company from Petrobras, Cemig says. The deal is expected to be worth more than $500m. Petrobras holds a controlling 49% stake in Brasil PCH, whose assets comprise 13 small hydroelectric plants in the states of Rio de Janeiro, Minas Gerais, Goias and Espirito Santo. A sale would come under a $9.9bn non-core asset divestment plan.
Exito Tempted Outside Colombia
Though “tremendous opportunity” remains in Colombia’s retail space, Grupo Exito is seeking greater expansion in LatAm, Jose Gabriel Loaiza, commercial VP, says. “We are on the lookout for opportunities in the region. We want to explore opportunities in Spanish-speaking countries,” the official says, speaking on a panel at the Colombia Inside Out event in New York this week. When the time comes, he explains, Exito would look at established well-run companies in Central and South America. The retailer is continuing to focus on growth in Colombia, with 50% of retail still in small hands. He also notes Uruguayan operations are catching up in terms of synergies following the 2011 purchase of Casino’s Uruguayan business for $746m. It is Exito’s only operation outside Colombia.
Gigante Clinches Office Depot Buy
Grupo Gigante has agreed to buy the remaining 50% of Office Depot Mexico it does not own from Office Depot for MXP8.77bn ($691m), it says. The buyer has arranged a 1-year bridge loan through BBVA and Credit Suisse, according to market sources, and would likely eventually turn to the bond market to replace it. The cash deal comes after the offer Gigante made in February at the same price, and is the conclusion of a strategic process that had also contemplated an IPO for the joint venture formed in 1994. The deal is subject to regulatory approval, and is expected to close within 30 days. Bank of America Merrill Lynch advised Office Depot. Gigante did not respond to a request for comment on the transaction.
Rede Holder Group Welcomes Second Offer
Bondholders of Brazil’s Rede Energia have welcomed a BRL3.2bn ($1.5bn) offer to buy nine Rede subsidiaries from Companhia Paranaense de Energia (Copel) and Energisa, which competes with a deal proposed last year from CPFL Energia and Equatorial Energia. The proposal is “a viable and much more valuable alternative to the plan Rede has proposed,” according to a statement from a steering group made up of some of the holders of Rede’s 11.125% perpetual notes. Calling the two “well capitalized” and “well qualified,” the group notes that the current plan was designed around a single investor team given the exclusive right to complete diligence as the basis for its proposed investment and that such exclusivity destroys stakeholder value. The new offer from Copel and Energisa includes a payment in cash as well as the assumption of part of the companies’ debt, and Energisa has asked that it be considered at a shareholder meeting scheduled for Wednesday. CPFL and Equatorial made an offer for Rede last year for a symbolic price of BRL1.00 and to the repayment of BRL2.22bn in the bankrupt utility’s debts. Rede filed for bankruptcy last year, and CPFL and Equatorial were given exclusive rights to present a purchase offer, which the bondholder group opposed, noting the existence of other qualified potential buyers.
Ambev Sees Caribbean, CentAm M&A Opportunities
Companhia de Bebidas das Americas (AmBev) sees potential for further acquisitions in Central America and the Caribbean, following a purchase of a stake in the Dominican Republic’s leading beer brand earlier this year. CFO Nelson Jose Jamel tells LatinFinance that the company believes there are growth prospects both in its home market, as well as in other parts of Latin America. “We do see opportunities moving forward not only to continue growing in Brazil – our home market with 70% of our results and a growing industry with a lot of opportunities – but we also see opportunities to continue growing abroad. The opportunities are more limited today, but particularly in Central America and the Caribbean we think there are a lot of opportunities for future acquisitions,” he says. As the company eyes acquisitions it is also looking at increasing its capex spending in Brazil to accommodate growth, particularly the north and the northeast regions. Ambev’s capex is set to triple this year from its pre-crisis spending in that area. Yet the drinks producer is unlikely to look at the debt markets to finance that, as it has strong free cash flows, Jamel says. Capex this year is expected to come to around BRL3.0bn ($1.40bn), a record for the company, up from BRL2.1bn last year and BRL1.0bn in 2008. In April, AmBev agreed to spend $1.24bn to acquire a 51% position in Cerveceria Nacional Dominicana (CND), and the AB InBev parent was able to negotiate through regulatory challenges to seal a $20bn deal for the remaining 50% of Mexico’s Grupo Modelo.
Mexican Builders Call off Deal
Javer and ICA have canceled a deal announced in December, in which Javer had agreed to acquire homebuilding assets from ICA’s ViveICA unit, the two Mexican companies say. ICA was to exchange the assets and its operating liabilities for a 23% stake in Javer, with Javer taking on responsibility for refinancing MXP600m ($46m) in project debt. Javer was to gain 20 homebuilding projects throughout Mexico. Having not reached an agreement, ICA says it will keep developing its current housing projects for the time being. “The company will also seek near-term opportunities to carry out transactions involving these assets that generate value,” ICA says.
Falabella Enters Brazil
Chilean retailer SACI Falabella has entered a new market in LatAm, through a Brazilian acquisition seen as small compared to its bottom line, but offering significant growth potential down the road. Falabella’s Sodimac home improvement unit has agreed to buy a majority position in Brazil’s Dicico for BRL388m ($190m), Falablella says. In the deal it will acquire 50.1% stake in Construdecor, which operates the Dicico chain of home improvement stores. Some BRL319m will come through the issuance of new Construdecor shares, and the remainder through the sale of shares from existing holders. The Chilean will rely on its own cash, as well as possible debt financing, to fund the purchase. The remaining 49.9% is in the hands of CEO Demitrios Markakis, who remains in his role. Credicorp Capital sees the transaction implying a price/sales ratio of 0.98x, based on Dicico’s 2012 sales of $384m. It finds this ratio “fair,” coming within the 0.5x-1.2x range of other acquisitions within the country. “Though marginally relevant in terms of valuation today, we believe it was the right step for the company for the long term, granting Falabella the opportunity to build out its Sodimac format with the Brazilian market,” Credicorp says. The shop says Brazil’s home improvement market is about 6x larger than Chile and somewhat fragmented, which presents “interesting” long term growth potential. Dicico booked sales of BRL789m in 2012. Falabella operates department stores, home improvement stores, supermarkets and shopping malls in Chile, Argentina, Peru and Colombia. Falabella made its debut in the international debt market last month, raising $750m in a transaction that included the first-ever global-CLP tranche from a corporate borrower. The Dicico deal is credit neutral for Falabella, Fitch says.
No Fear on Long-Term Investment: AmBev
Brazil’s AmBev is considering further acquisitions and growth, saying difficult markets are no reason to cut investments