Brazilian mall operator Iguatemi has agreed to sell its stake the Shopping Center Iguatemi Rio to fellow Brazilian Ancar Ivanhoe Shopping Centers, it says, for BRL197m ($99m). The deal includes Iguatemi’s 88.5% of the mall and 100% of an adjacent section of land. Closing is subject to regulatory approval.
Category: M&A
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GNB Sudameris Snags Latest HSBC Divestment
Colombia’s Banco GNB Sudameris has agreed to buy HSBC’s operations in Colombia, Uruguay, Peru and Paraguay, for $400m, HSBC says. HSBC had previously announced it was in talks to sell the assets. Though the Colombian portion is small – 15th in assets with just over $1.5bn, representing 1.7% market share – it represents the latest asset to change hands in a rapidly shifting landscape where foreign players have paid high multiples to enter. The businesses to be sold consist of 62 branches across the 4 countries and a gross asset value of $4.4bn. “This will not change the market much. It is basically a strategic move to become more relevant in a few different countries,” says a Bogota-based FIG equity analyst. GNB is paying cash, and the Colombia and Peru portion is expected to close in the fourth quarter and the Uruguay and Paraguay portion in the first quarter of next year. The sale is part of a continued process to shed non-core assets in the region. In January, HSBC sold operations in 3 Central American countries to Colombia’s Davivienda for $801m, before selling its insurance business in Mexico and Argentina to France’s AXA and Australia’s QBE Insurance Group in March as part of a $1.23bn package also including Asian assets.
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HSBC Discusses Further LatAm Asset Sales
HSBC is in talks to sell its operations in Colombia, Peru, Uruguay and Paraguay, it says, as part of a continued process to shed non-core assets in the region. The bank has been scaling back in countries where its presence is too small or in those that offer too little growth potential. HSBC does not offer further details about the discussions. In January, HSBC sold operations in 3 Central American countries to Colombia’s Davivienda for $801m, before selling its insurance business in Mexico and Argentina to France’s AXA and Australia’s QBE Insurance Group in March as part of a $1.23bn package also including Asian assets.
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LAN-TAM Nears Final Step
Chile’s LAN has launched a public share exchange offer for Brazilian TAM’s shares, it says, in a final step to conclude the merger between the two airlines. LAN, which first agreed to merge with TAM in 2010, is offering to exchange each TAM share for 0.9 of LAN’s Brazilian Depositary Receipts (BDR). Each BDR is equivalent to one LAN common share. The offer will be done through an auction process scheduled for June 12. After the conclusion, TAM’s shares will be delisted. TAM ordinary shares closed Thursday at BRL46.29 ($23.67) and preferred shares at BRL45.95, and LAN at CLP13,248 ($27.74).
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Markets, Governments Challenge Agribusiness
With demand pushing farmland prices higher, and in some cases spooking politicians, LatAm agribusiness operators are broadening their geographies. Though fundraising hasn’t been easy, some – including Brazil’s LDC Bioenergia, which made initial IPO filings Thursday – are planning to give the markets a try. Farmland plays have pushed land prices in Brazil and Argentina to new heights, and large operations such as Adecoagro, BrasilAgro, and SLC Agricola have been challenged by governments worried about purchases by large international players and sovereign wealth funds. “The Chinese and Arab interests would have to hire locals to work the land and pay export taxes for the products they send overseas just like everyone else,” Julio Piza, CEO of BrasilAgro, tells LatinFinance. BrasilAgro is controlled by Argentina’s Cresud, and has been forced to suspend all land purchases in Brazil. However, the company still has plenty of land for future transformation that can continue to generate returns over the next 2 years without having to increase its land stock, he says. “That’s not to say we wouldn’t like to buy more, but 2 years gives us time to adapt to new legislation,” Piza adds. Argentina passed a law late last year banning foreign-controlled companies or individuals from holding more than 1,000 hectares in the country’s agriculture-rich areas, and Brazil also limits foreign-owned land holdings to no more than 15% of the national territory. “Adecoagro can’t buy any more land in Argentina. In Brazil, when rules are finally clarified, even a new restriction will be better than what we have today,” Alessandro Baldoni, analyst at Deutsche Bank, tells LatinFinance. The legal obstacles have piled on top of the European financial struggles, fears of slower economic growth in Asia, and a drought in Argentina and Brazil, as one more issue giving equity investors second thoughts about the sector. Future growth will have to come from other countries in South America. The company ha
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Cosan OKs Acquisition Debt
Cosan will issue BRL3.3bn ($1.68bn) in debentures to cover costs of the acquisition of a majority stake in Comgas, it says. The debentures are to be bought by Bradesco and Itau, functioning basically as a loan, and pay 123% of the DI. Separately, Citi is to provide Cosan with a 5-year GBP54m ($87m) loan featuring a 2-year grace period. Cosan agreed last week to pay BRL3.4bn ($1.79bn) for the 60.1% of Brazilian gas distributor Comgas owned by BG Group. Fitch has placed Cosan on rating watch negative, noting that the debt could increase Cosan’s net leverage, on a pro forma basis, to around 3.7x, from 2.1x.
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Patria Weighs Vulcabras Investment
Brazil’s Vulcabras has signed an agreement to negotiate an equity investment from private equity firm Patria Investimentos. It does not give an indication of the size of the investment being discussed with the Vulcabras’ controlling shareholders. BTG Pactual is advising Vulcabras, according to an investor relations official, who declines to offer additional details. The maker of shoes and sporting goods planned and subsequently pulled a public follow-on equity sale last year.
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AMX Attempts Cheap European Entry
America Movil (AMX) has offered EUR2.64bn ($3.44bn) to bring its stake in Dutch telecom KPN to as much as 28%, it says, seizing a cheap opportunity to expand in Europe and to better position itself against Telefonica. The Carlos Slim-controlled telecom holds a 4.8% stake in KPN, and is offering EUR8.00 per share to buy up to an additional 23.2%, representing a 24% premium to the previous day’s closing price, it says. KPN shares closed at EUR7.58 Tuesday, up more than 17%. “It’s an attractive offer [for AMX], as it presents a discount,” Valeria Roma, analyst at Monex, tells LatinFinance. She says the offer implies a 5.06x EV/Ebitda multiple, which is a 15% discount, and comes versus a European sector average of about 6.3x. “From a strategic standpoint, it’s an investment in a telecom with a strong profile in the countries that have among the most solid economies in the Eurozone,” she adds. It is not AMX’s first attempt to enter Europe, and is seen as offering the company a launching pad for additional growth in the continent as well as a means to check rival Telefonica. “AMX is almost certainly not just looking at the macro-economic angle, but at what it might extract from Telefonica in exchange for the German assets,” Robin Bienenstock, senior analyst at Bernstein, tells LatinFinance. She notes KPN’s falling Ebitda – to EUR5.1bn in 2011 from EUR5.5bn in 2010 – and that there is particular value in the German operations. Telefonica would be an obvious purchaser for the German assets if they were to be sold, as the German telecoms face domestic ownership caps. Were AMX to end up the full owner of KPN, it may find itself surprised at the difficulty of creating value in that asset, she adds. America Movil says it is not interested in total control of KPN, and that it supports the strategic plans of KPN’s management and its shareholders. AMX would pay cash, and expects to get approval from the local securities regulator and carry out the offer by the beginning of June. I
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Colombian Gets CentAm Paint Assets
Colombia’s Compania Global de Pinturas (Pintuco) has agreed to buy the Central American paints business of US Global adhesives company HB Fuller for $120m, HB Fuller says. The American company is shedding the business it has owned since 1967 because paint is no longer core to its strategic plan. The CentAm assets generated revenue of $114m and Ebitda of $13.3m in 2011. The transaction is expected to be completed within 60 days. Pintuco, part of Grupo Mundial, has a presence in Colombia, Venezuela, Ecuador, Costa Rica, Panama and the Caribbean.
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Investor Adds to Vanguarda Stake
Brazilian agricultural investor Otaviano Olavo Pivetta has acquired 267.2m additional shares, or about 11.5%, of Vanguarda Agro, Vanguarda says. The block was bought from investment firm Veremonte Participacoes, and would be worth BRL98.9m ($51m) at Tuesday’s BRL0.37 closing price. The deal takes Pivetta’s position to 27.85%.