BTG Pactual has agreed to buy Colombian brokerage Bolsa y Renta, it says, for $51.9m, as the bank continues to spend its IPO funds to expand outside of Brazil. Bolsa y Renta will use part of the proceeds to acquire a 0.25% interest in BTG. The executive team of Bolsa y Renta will stay on as managers of BTG’s Colombian operations, BTG says. Bolsa y Renta claims $2.57bn AUM in its wealth management division and $874m AUM in its asset management business. The transaction remains subject to regulatory approval. The deal follows last year’s purchase of Chile’s Celfin Capital in exchange for 2.42% of BTG’s equity and $245m in cash, a deal that also brings a presence in Peru. After hiring Javier Artigas in April to lead an on-the-ground presence in Mexico, that market could be next.
Category: M&A
Costco Buys Out CMM in Mexico JV
Costco is acquiring Controladora Comercial Mexicana’s 50% stake in their Costco de Mexico joint venture, for MXP10.65bn ($767m), the companies say. As part of the transaction, Costco Mexico is paying out a MXP4.77bn dividend, 50% of which goes to Costco to help it fund the purchase of CCM’s stake, along with cash on hand and investment balances. CCM will receive the other 50% of the dividend, and use it and the proceeds from the sale to pay down debt. “We think it is a good use of our cash, and it happened now,” Costco CFO Richard Galanti says on a conference call when asked about the motivation and timing of the deal. “Costco operates a very profitable business in Mexico and we think this transaction was something the company has wanted to do for some time,” Credit Suisse says in a report, calling the deal “positive for both companies.” Costco Mexico will now be able to open stores at a faster pace, changing the competitive dynamics of the sector, the bank says, noting that CCM, too, will have a better financial position to compete in its portion of the sector. The deal should be accretive for Costco in 2013, CS says. CCM, which had to restructure its debt in 2010, should see its leverage plummet from 4.5x net debt/Ebitda to 1.4x after the deal is complete. CCM chairman Guillermo Gonzalez Nova and CEO Carlos Gonzalez Zabalegui will remain on Costco Mexico’s board of directors, and Jaime Gonzalez Solana stays on as Costco Mexico CEO.
America Movil Ups KPN Stake
Mexican telecom America Movil (AMX) has spent EUR102m ($127m) to purchase 14m ordinary shares in Dutch telecom KPN at a cash price of EUR7.80-EUR7.85 per share, it says, levels lower than the EUR8.00 it is offering to holders in an offer launched in May. The series of transactions revealed Monday and Tuesday brings AMX’s holding to 7.86%, or 112.5m shares, it says in a statement. KPN, which hired Goldman Sachs and JP Morgan to advise it on its alternatives, is heard to be considering spinning off its Belgian and German units to dodge the hostile bid, which KPN finds too low. AMX is offering to buy an additional stake of up to 22.9% of KPN to bring its stake as high as 27.7%, through June 27. The move could cost it $3.25bn total. KPN shares closed Tuesday at EUR7.86.
Bolivia Eyes Mine Nationalization
Discussions remain underway with Bolivia’s government amidst reports that the government will nationalize the Swiss-owned Glencore International Colquiri mine, located in the Inquisivi province, say sources familiar with the process. A number of parties are involved in the discussions, including miners, unions, cooperatives and the government. Last year, Glencore withdrew a $475m offer for CST Mining Group’s interest in Peruvian copper project Mina Justa, following a failure to agree on an offtake deal, said people close to the transaction. And in May, Bolivia’s government nationalized its electricity grid, with the government’s Empresa Nacional de Electricidad (ENDE) absorbing 99% of the shares of Empresa Transportadora de Electricidad, previously owned by Spain’s Red Electrica.
Minsur Adds to Mine Equity
Peru’s Minsur has injected an additional $100m into its Cumbres Andinas subsidiary, via the issue of new shares, to help finance the acquisition of a stake in the Marcobre copper project, it says. The funds follow a $300m equity issuance announced last week for the same purpose. After the transaction, Minsur will hold 99.96% of Cumbres’ shares. It is already putting together a $200m loan to help with the purchase. In April, Minsur agreed to acquire 70% of Marcobre from Hong Kong’s CST Mining for $505m.
Arauco Adds in Canada
Celulose Arauco has agreed to purchase Canadian wood panel firm Flakeboard for $243m, it says. The forestry unit of the Chilean Copec conglomerate claims the buy makes it the top wood panel producer in the Americas, including capacity of 2.9m cubic meters of panels per year in the US. Flakeboard operates two wood panel plants in Canada and five in the US. Arauco is funding the purchase with cash on hand, an investor relations official says, through it does not rule out a bond sale near the end of the year or early next year to replace the cash, as the company also has a maturity coming due then. Arauco did not use an external advisor. The sale, subject to regulatory approval, is expected to close in the second half of the year.
Corfi Moves for Promigas
Colombia’s Corporacion Financiera Colombiana (Corficolombiana) plans to offer to buy the 75.03% in gas distribution and pipeline company Promigas that it does not own, it says. The financial group is offering up to COP2.49trn ($1.41bn), targeting 99.7m shares at a price of COP25,000 each. The price represented a 13% discount to Wednesday’s COP28,900 closing price. Shares remained Thursday at that level, with trading suspended that morning. The takeover bid has been planned since Corficolombiana, along with other investors, closed the acquisition of companies owning 52.13% in Promigas. The impact of the transaction is positive, says Bolsa y Renta in a report, noting that it values Promigas at COP30,000 per share. The shop adds that Corficolombiana could fund the purchase using its cash and through the sale of assets.
Gafisa to Issue Equity to Complete Alphaville Buy
Brazilian homebuilder Gafisa plans to issue shares to help finance the BRL359m ($177m) purchase of the remaining 20% stake in its Alphaville Urbanismo unit, it says. It will offer 70.25m shares, representing BRL150m at Wednesday’s BRL2.13 close, the most recent closing price. The company says it is defining the steps of the process, and will give additional details about the purchase in the future. Gafisa bought 60% of the high-income housing unit in 2006, before adding another 20% in 2010. There had been concern the homebuilder lacked the funds to complete the acquisition, following a poor first quarter. The company turned down a buyout offer from Chicago real-estate magnate Sam Zell and Brazilian investment fund GP Investimentos in March.
Caixa Enters IT Deal
Brazil’s Caixa Participacoes (CaixaPar) has agreed to acquire a 22% stake in Brazilian IT services company CPM BraxisCapgemini from controller Capgemini, it says. The deal also makes CPM a preferred IT supplier to the Caixa Economica Federal bank for 10 years. CaixaPar is acquiring the stake through the simultaneous purchase of shares from existing shareholders and subscription to a BRL121m ($60m) capital increase, for a total investment of BRL321m. It will become the second-largest shareholder in CPM after France-based Capgemini, which will hold 58.8%. The transaction is subject to regulatory and Central Bank approval, and is expected to close in the coming months. CPM already boasts a relationship with Bradsco that makes it one of the larger IT providers to Brazil’s financial sector.
Colbun to Hold on to Hydro Project
Colbun does not have plans to sell any of its stake in the Hidroaysen hydropower project, it says. The Chilean power generator’s board has recommended holding off on an environmental impact study for a Hidroaysen’s transmission line, and it will evaluate ownership conversations – it currently owns 49% – as the project develops. The 2,750 megawatt, 5-dam $3bn-plus project is a joint venture with Endesa, located near Coyhaique in the Andes.