AuRico Gold has sold out of its position in Mexico’s Endeavour Silver in a CAD95m ($97m) block trade, Endeavour says. The sale comes a week after the Canada-based miner operating in Mexico sold $750m in mining assets to Carlos Slim’s Minera Frisco. The 11m shares in Endeavour, also a Canadian Miner operating exclusively in Mexico, were sold at CAD8.60 each. CIBC, BMO Capital Markets and Dundee Securities managed the sale.
Category: M&A
Posted inDaily Brief
Primav Clinches EcoRodovias Stake
Italy’s Impregilo has accepted a BRL2.02bn ($995m) bid from Brazilian construction company Primav Construcoes for a 19% stake in EcoRodovias, EcoRodovias says. The BRL19.00 per share price for the 106m shares represents an offer sweetened last week from the BRL17.90 offered in July. The offer represents a 5% premium to the previous day’s closing price, Impregilo says, a 15.6% premium to the average price in the last six months, and an 11x Ebitda multiple. EcoRodovias shares closed Wednesday at BRL17.40. Primav, which is controlled by the Brazilian conglomerate CR Almeida, already owned 45% of EcoRodovias. Impregilo maintains a position in EcoRodovias of about 10%, though said Wednesday that it was evaluating an offer from BTG Pactual to buy 3.7% at BRL16.50 per share. It plans to use the proceeds to pay down all of its financial debt. The Italian group will also evaluate using some of the proceeds for a dividend payment, it says. Bank of America Merrill Lynch advised Primav and Banca IMI advised Impregilo. The transaction is expected to close by the end of the year.
Posted inDaily Brief
Canacol Takes Over Peer
Canacol Energy, a Canadian oil company operating in Colombia, Brazil and Guyana, has agreed to take over Shona Energy, it says, in a deal worth $148m. The deal gives Canacol five exploration blocks representing 15.8m barrel of oil equivalent (boe) reserves belonging to Shona, a US oil and gas company operating in Colombia and Peru. In the deal, each Shona common share will be exchanged for CAD0.09 ($0.09) and 1.06 Canacol shares, and each Shona preferred share exchanged for $100 cash. The total value is approximately $148m, according to a Canacol spokesman, and the consideration represents a value of approximately CAD0.56 per Shona common share, based on the volume weighted average price of the Canacol shares for the 15 trading days ended October 12. Canacol shares closed at CAD0.59 Tuesday, and Shona CAD0.46. Canacol should issue 246m new shares in total. After the arrangement, Canacol plans to consolidate its shares on a 1-for-10 basis to reduce the total number of shares to 86.5m. Canaccord Genuity advised Canacol and AltaCorp advised Shona. The transaction is subject to shareholder and regulatory approvals and is expected to close on or around December 20. The combined company should have total reserves of 32m boe.
Posted inDaily Brief
Pair Considers Rede Buy
Brazilians CPFL and Equatorial Energia have signed a letter of understanding for the possible purchase of troubled power company Rede Energia, Rede says. Equatorial, which last month agreed to buy power distributor Centrais Eletricas do Para (Celpa) from Rede, and CPFL would jointly control Rede, through the deal will hinge on Rede’s restructuring plan receiving approval from Brazil’s electricity regulator and from creditors. In late August, authorities seized eight units of Rede in efforts to prevent interruption in electricity service in six states. No financial details were disclosed.
Posted inDaily Brief
Duratex Launches Tablemac Tender
Brazil’s Duratex has launched an offer to buy up to 12% of the publicly traded shares of Colombia’s Tablemac, it says. As part of its plan to eventually obtain as much as 52% of the industrial wood panels specialist, it will look to spend as much as COP48.72bn ($27m) to buy up to 4.06bn shares at COP12.00 each, it says. The offer will take place October 17-30, with allocations November 1. In May Duratex agreed to buy 25% of the Tablemac for $56m, at the same price. Under the agreement in May, Duratex can, within the next 2 years, opt to buy another 15% at the same per-share price adjusted by an annual rate of 6.25%.
Posted inDaily Brief
Primav ups EcoRodovias Bid
Brazilian construction company Primav Construcoes has increased its offer to buy a BRL2.02bn ($1bn) stake of shares in EcoRodovias from Italy’s Impregilo. Primav is offering BRL19.00 per share, up from 17.90 offered in July, for 106m shares, EcoRodovias says. The offer represents a 50% premium to the previous day’s closing price. EcoRodovias shares closed Wednesday at BRL18.13. The offer for the stake representing about 19% of the toll-road operator is valid through October 18. If accepted, Impregilo would still maintain a position in EcoRodovias of about 10%. Primav, which is controlled by the Brazilian conglomerate CR Almeida, already owns 45% of EcoRodovias.
Posted inDaily Brief
Slim Adds Mines
Minera Frisco has agreed to pay $750m to acquire mining assets in Mexico from AuRico Gold, it says. The deal includes the operating Ocampo gold and silver mine, the Venus and Los Jarros projects and a 50% stake in the Orion project. The transaction is somewhat difficult to value, analysts say, due to the involvement of pre-operational assets and the infrequency of similar transactions in Mexico. Though the price tag represents less than 10% of Frisco’s market cap, the new assets’ contributions to revenues could be much larger, Julio Zetina, an equities analyst at Vector Casa de Bolsa, tells LatinFinance. “Slim knows how to buy. They are good asset hunters,” he adds. Frisco mentions financing for the sale coming from Bank of America Merrill Lynch, its advisor on the deal, and the company does not respond to a request for additional comment. With less than $200m in cash on hand, Zetina says, Frisco will unlikely use much of its own resources. A debt financing might make more sense for the company, he adds, despite equity markets being very welcoming for Mexican issuers in recent weeks. Canada-based AuRico plans to use proceeds to pay down debt, make other investments and pay dividends. The transaction is expected to close in December. Credit Suisse BMO, CIBC and Fasken Martineau DuMoulin advised AuRico. Frisco was spun off from Carlos Slim’s Grupo Carso holding company last year, with Slim owning nearly 80%.
Posted inDaily Brief
Corpbanca Moves up Colombian Banking Ladder
Chile’s Corpgroup is set to increase its scale in Colombia following an agreement to purchase Helm Bank for an expected $1.28bn. Helm had long been rumored to be for sale while international players paid high premiums to scoop up other Colombian banks in the past year. The deal, seen as coming cheaper than other recent Colombian FIG deals, follows on from the group’s $1.23bn purchase of Santander Colombia and makes Corpbanca Colombia’s fifth-largest bank. “The price paid in our opinion is reasonable for a transaction of this nature,” Bolsa y Renta says in a report, noting it is 5.4% below what the brokerage had previously estimated a sale of the Helm to bring. The valuation represents 15.1x 2012 price/earnings and 1.78x book value, the shop says. Corpbanca sees 14.2x 2012 p/e and 1.63x book, it says. The levels Corpbanca estimates indicate a premium of 11.6% to the average levels seen in the most recent Colombian FIG deals but also a 40.0% discount to the book values, Interbolsa says in a report. In the deal, Corpgroup buys 91% of Helm’s shares from its controllers, it says, for $0.28 per share, and will follow up with a public offer for the remainder. This price represents a slight premium to Monday’s COP487 ($0.27) close. Shares closed Tuesday at COP482, and have risen 58% this year. Corpgroup also agreed to pay $17m for 80% of Helm’s insurance unit. Corpbanca Chile plans to raise $600m in equity capital, including the approximately $225m that the IFC agreed to pay for 5% of the bank last week. Corpbanca Colombia plans a separate raise of up to $1bn, of which Helm’s controllers will buy $440m and Corpbanca controllers $285m. Inverlink advised Helm. Simpson, Thacher & Bartlett and Pose Herrera were legal advisors to Corpgroup, which does not return a request for comment on financial advisors. At the end of the process, Corpgroup expects to hold 64% of Corpbanca Colombia, and the Helm controllers 20%. Cross-border subordinated bonds could also help fund the acquisi
Posted inDaily Brief
US Manager Moves for Chilean Pension
Insurer and asset manager Principal Financial has agreed to acquire Chilean pension fund manager AFP Cuprum for an estimated $1.51bn, the companies say. In the deal, Empresas Penta and Inversiones Banpenta will sell their 11.4m shares, representing 63% position, at UF1.76 ($84.06) each. A public offer will then be made for the remaining 37% at the same price. Cuprum shares closed Monday at a level equal to UF1.16. The transaction is expected to close in 1Q 2013, pending regulatory approval. Principal expects it to be immediately accretive to EPS and ROE. Cuprum has approximately $32.1bn assets under management, and offers products including mandatory employee-funded pension plans, voluntary pension products, and other long-term savings products. Lazard advised Principal on the transaction, along with Cariola, Diez, Perez-Cotapos and Debevoise & Plimpton. Principal is present in 15 countries.
Posted inDaily Brief
UnitedHealth Pays up for Brazil Entry
UnitedHealth Group has agreed to pay $4.9bn to buy 90% of Brazil’s Amil Participacoes, the companies say, in a transaction seen as coming at a significant premium. The agreement gives the largest US healthcare operator an entrance into an underpenetrated Brazilian market and control of the country’s largest healthcare organization. The deal for 359m shares comes at BRL30.75 ($15.15) per share, representing a 21.5% premium to Friday’s BRL25.30 close. “This is a high price. We think UnitedHealth must see a large upside,” says a Sao Paulo equity analyst. He sees the transaction coming at 32.4x 2012 price/earnings and 26.4x 2013 p/e, compared to the respective 26.5x and 20.7x levels at Friday’s closing price. The US operator is paying up for an association with founder and CEO Edson Bueno – who keeps a stake and joins United’s board – and his track record in Brazil, as well as for access to a more vertically integrated model than it has in the US, the analyst notes. Both could be useful for future EM expansion as well as making improvements in United’s home market. Raymond James sees the deal at 38.2x 2013 p/e, it says in a report, yielding a 76% premium to Amil’s historical averages. “The valuation is rich for this kind of business, but the growth potential is much better than the US-based options,” Matthew Cofina, an analyst at Morningstar, tells LatinFinance. He notes it could boost United’s margins going forward, and that Brazil is an attractive base for possible additional acquisitions. UnitedHealth will buy Amil in a two-step process, with Brazilian tax benefits reducing the effective cost of the acquisition by $600m to $4.3bn. Following Brazilian regulatory approval expected in 4Q, UnitedHealth will buy 60% percent of Amil’s outstanding shares from controllers. In 1H 2013, it will make a public offer for the remaining 30% percent. Bueno has also agreed to invest about $470m in UnitedHealth stock and hold the shares for five years, with Bueno and partner Dulce Pug