Japanese beer company Kirin struck a $1.35bn deal with minority shareholders of Brazilian brewer Schincariol, to acquire the 49.54% stake in the company that it didn’t already own. The deal comes just three months after Kirin agreed to pay $2.52bn for 50.45% of Schincariol, a transaction that, at the time, represented an enterprise value (EV) to Ebitda of 15.7x, significantly higher than the price paid in previous brewer company acquisitions. With the latest stake purchase, analysts estimate the final full acquisition figure for Schincariol at anywhere between 13 and 15x EV/Ebitda, higher than the prices paid for Heineken’s purchase of FEMSA Cerveza, estimated at 11x. “During the last 5 to 10 years in this business, the range has been 10 to 15x,” said Lauren Torres, a consumer products analyst at HSBC. Although the Brazilian market has seen a slowdown in consumption of late, Torres points out that with the growth these companies have seen in recent years, companies like Kirin feel that Brazil is definitely a place to do business. Kirin’s acquisition of Schincariol was not easy. Its initial stake purchase in August sparked the ire of minority holders which took their grievances to court seeking to block the sale. A court finally lifted the injunction and allowed the deal to proceed in mid-October. Schincariol’s majority owners originally hired BTG Pactual and Mattos Filho as advisors, while minority holders at one point worked with Teixeira Martins & Advogados. Kirin hired Citi, TozziniFreire Advogados and the Tokyo-Marunouchi Law Offices.
Category: Japan
Colombia Eyes Samurai in 2012
Colombia is taking steps to potentially issue in the Samurai bond market in early 2012, says Miguel Angel Gomez, capital markets advisor at Colombia’s ministry of finance. “We have completed our financing needs for this year, but we are analyzing and starting the process in the next couple of months for a potential transaction in 2012.” The sovereign, which has yet to mandate banks, met with Japanese investors in September. While a specific amount has yet to be determined, the sovereign would be interested in a structure similar to its 2009 Samurai transaction when it placed JPY45bn ($503m) in bonds privately with Japanese investors, says Gomez. The 2019 Samurai issue was sold at par with a 2.42% coupon, for a yield 93bp over JPY swaps. The AA rated transaction came with a JBIC guarantee; with proceeds used to help fund the sovereign’s 2009 budget needs. Mitsubishi UFJ Securities and Daiwa Securities SMBC managed the 2009 transaction. As part of diversification efforts, the sovereign will also consider a USD and EUR transactions for next year.
AMX Debuts in Samurai Market
America Movil (AMX) has raised JPY12bn ($156m) through in dual tranche issue, marking its debut in the Samurai market. A 3-year JPY6.9bn tranche was sold at par to yield 1.23% at yen Libor+80bp, while a 5-year JPY 5.1bn bond was priced at par to yield 1.53% or yen Libor plus 100. Both priced in line with earlier guidance of yen Libor+70-90bp for the 3-year and +90bp-110bp on the 5-year. “This is the first time a Latin America corporate has tapped a Samurai transaction without a JBIC guarantee,” notes a person familiar with the transaction. The deal marks the first corporate issuance in this market in about five years, and should pave the way for other LatAm issuers to follow suit. The Samurai follows AMX’s $2bn 5-year bond and $750m retap of its 2040s in which it locked in the second lowest coupon ever achieved by a telecommunications company. AMX issued a CHF270m 2016 bond in August that came with a reoffer price of 99.775 to yield 2.039%, or mid swaps plus 86bp. The Samurai transaction was led by Mitsubishi UFJ-Morgan Stanley and Mizuho. This comes after America Movil also recently met investors in Europe via Deutsche Bank. Japan Credit Rating Agency has assigned an A rating with stable outlook to Japanese yen-denominated bonds from America Movil (AMX). AMX is rated A2/A/A.
AMX May Price Samurai This Week
America Movil (AMX) is expected to price a Samurai bond as soon as this week after guidance was heard released at yen Libor plus 70-90bp for a three-year fixed-rate tranche and plus 90bp-110bp on a fixed-rate five-year. The deal marks the first corporate issuance in this market in about five years and is an important litmus test for other LatAm blue-chips that may want to tap Japanese investors. Brazilian oil giant Petrobras was the last LatAm corporate to raise money in the Samurai market when it issued a JPY35bn 2.15% 10-year in 2006 at yen Libor+27bp. Leads were unavailable for comment. A Samurai would follow AMX’s $2bn 5-year bond and $750m retap of its 2040s in which it locked in the second lowest coupon ever achieved by a telecommunications company. AMX issued a CHF270m 2016 bond in August that came with a reoffer price of 99.775 to yield 2.039%, or mid swaps plus 86bp. AMX is rated A2/A/A. The Samurai transaction is being led by Mitsubishi UFJ-Morgan Stanley and Mizuho. This comes after America Movil also recently met investors in Europe via Deutsche Bank. Japan Credit Rating Agency has assigned an A rating with stable outlook to Japanese yen-denominated bonds from America Movil (AMX).
Codelco Borrows from Offtaker for M&A
Taking the unusual step of turning to an offtaker for financing rather than banks, Codelco has agreed to a standby bridge loan of up to $6.75bn from Japan’s Mitsui and Co., to help fund the Chilean state-owned miner’s possible purchase of up to 49% of the Anglo Sur mining complex. Codelco has an option to buy the position in the Chilean complex, owned by Anglo American, and this can be exercised beginning in January. Codelco says it values the stake at $9.76bn. Once the loan is disbursed, the credit would have a tenor of up to 12 months. If not repaid with cash or 50% of Codelco’s Anglo Sur equity interest at the end of the 12 months, the debt would automatically be converted into a 5-year term loan. Company officials did not respond to requests to comment on the interest rate. The option to acquire the 49% stake had previously been held by fellow Chilean state mining company Empresa Nacional de La Minera, which sold it to Codelco for $175m. The option comes up every 3 years and expires in 2027. The bridge financing arrangement comes as Codelco and Mitsui announce an offtake agreement for 30,000 tons of copper per year subject to market based pricing terms. Anglo Sur includes the Los Bronces and El Soldado mines, the Chagres smelter and the Los Sulfatos and San Enrique Monolito prospects.
Court Clears Way for Kirin Brazil Entry
A Brazilian court has lifted an injunction blocking the sale of a majority stake in brewer Schincariol to Japan’s Kirin, says a lawyer on the deal. In a matter of days, the Japanese brewer should be able to assume control of the 50.45% stake purchased for BRL3.95bn ($2.25bn) in August from a holding company owned by the brothers Adriano and Alexandre Schincariol. Cousins Jose, Daniela and Gilberto Schincariol – owners of 49.55% – had pushed through the injunction, alleging negotiations with Kirin were handled improperly, and they could still appeal the decision in a higher court. In the deal with Kirin, Adriano and Alexandre are to remain with the company, as executives, for at least the next 36 months. At the time of agreement, Kirin said the deal represented a 15.7x EV/Ebitda price over the 12 months to March 2011. Analysts found the level slightly expensive – or at least higher than competing bids heard at BRL2.2bn and BRL1.8bn – and thought it represented a premium for Kirin to enter a growing and lucrative market. Kirin is financing the deal almost entirely through a combination of existing credit lines and pre-approved bridge loans through Japanese banks. Kirin was advised by Citi, TozziniFreire Advogados and The Tokyo-Marunouchi Law Offices. The Schincariol brothers were advised by BTG Pactual and Mattos Filho.
AMX Gets Japanese Rating
Japan Credit Rating Agency has assigned an A rating with stable outlook to Japanese yen-denominated bonds from America Movil (AMX). The Mexican wireless operator was heard sounding out Japanese accounts for a potential Samurai bond transaction via Mitsubishi UFJ-Morgan Stanley and Mizuho in late September. Additional details were not available. A Samurai deal would follow AMX’s $2bn 5-year bond and $750m retap of its 2040s done in September. America Movil is currently also looking at the Euro market, and is scheduled to wrap up fixed income meetings in Frankfurt on Friday.
Mexico Awaits Samurai Feedback
A Samurai bond without a JBIC guarantee is still on the cards for Mexico, but it appears that timing could be pushed back given the unease pervading market sentiment. “For us this is a medium-term strategy,” Alejandro Diaz de Leon, the country’s head of public credit, told LatinFinance on the sidelines of the IMF meetings in Washington over the weekend. “We want to have Japanese investors as a regular part of our external portfolio. We are committed to that but we are mindful of market conditions and clearly don’t have a particular deadline for that transaction.” Mexico has been engaging Japanese accounts about the idea of issuing a bond without a JBIC guarantee, marking the next natural step for a sovereign that has already sold debt in Japan with the support of the public financial institution. This time it is heard eyeing a tenor in the 5-year range. Up until now, Mexico has sought longer maturities but with the aid of a JBIC guarantee, most recently selling JPY150bn ($1.8bn) of 10-year bonds at a 1.51% yield in October. “We still haven’t received the final feedback from investors. In the next week we will have a clearer picture in that regards. For us it is clearly on the table and it is a question of when we can do it in a way that all parties involved feel successful about the transaction,” Diaz said.
AMX Sounding Out Japanese Accounts
America Movil (AMX) is heard sounding out Japanese accounts for a potential Samurai transaction with Mitsubishi UFJ-Morgan Stanley and Mizuho. Additional details were not available. A Samurai would follow AMX’s $2bn 5-year bond and $750m retap of its 2040s done earlier this month in which it locked in the second lowest coupon ever achieved by a telecommunications company. AMX issued a CHF270m 2016 bond in August that came with a reoffer price of 99.775 to yield 2.039%, or mid swaps plus 86bp. AMX and the banks said to be involved were unavailable to comment. AMX is rated A2/A/A.
Fibria Reaches Non-Core Sale Agreement
Fibria has agreed to sell $313m in non-core assets to Oji Paper, firming up a process started last month when Fibria entered into exclusive talks with the Japanese buyer. The deal includes the Piracicaba facility that produces heat-sensitive, self-copying and couche paper, and marks the last of Fibria’s non-core assets to go as part of a long-term deleveraging plan. “They wanted to be a one-product company making pulp, and that’s their major product line,” a US-based industry analyst explains. The asset sale also helps bring down the company’s high debt, the analyst said. The deal is expected to close September 29, subject to government approval. Goldman Sachs advised Fibria.