BM&F Scoops up $3.3bn in IPO

Brazil’s commodities and futures exchange, the BM&F, followed in the footsteps of the Bovespa Tuesday with a blowout IPO, which was heard more than 10x oversubscribed. The deal came at BRL20.00, at the top of a revised BRL18.00-BRL20.00 range, and a 23% upwards revision from the initial BRL14.50-BRL16.50 band. At that price, the BM&F will raise $3.3bn assuming the over allotment option is exercised, which is substantially higher than the $2.6bn it would have raised at the midpoint of its initial range. BM&F is expected to announce the final pricing on the sale of 299m shares today Bankers familiar with the deal say investor price sensitivity was very low, even after the increased range, which suggests the shares could see an aftermarket pop. The Bovespa, which went public last month in a similarly sized offering, saw its shares surge as much as 50% in the first day of trading, something the BM&F would like to avoid, say bankers. Lead managers include Morgan Stanley, BBI, Merrill Lynch, Itau BBA, Deutsche Bank and Citi, according to Dealogic. The deal comes in stark contrast to the recent failures of less liquid Brazilian equity issuers.