Equity Deals Drop Like Flies

LatAm equity offerings are getting pulled as aggressive selling and volatility continue to dominate trading. The Bovespa has alternated between severe ups and downs this week, and finished Thursday up 6%, taking the YTD performance a 10% loss. The choppiness has prompted four companies to withdraw attempts to sell shares. “There just aren’t any buyers out there,” says one ECM banker. The most recent casualty was Lamosa. The publicly traded Mexican home improvement company withdrew plans to issue an undisclosed amount of shares via JPMorgan on Thursday. Copasa, the Brazilian water and sewerage utility, was scheduled to price a secondary offering Wednesday, via Banco do Brasil and Citi, but pulled out, citing market conditions. In the IPO market, Norse Energy, scrapped its attempt to raise BRL414m through the sale of 23m shares at BRL18 via UBS Pactual. And IdeasNet, another JPMorgan deal, announced plans to postpone its debut offering, which did not get far enough with investors to identify potential pricing. The ECM banker believes that if the US equity market finds a bottom in the coming weeks, that could set the stage for a return to stability and an ensuing pickup in deal activity. Until that happens it is unlikely anyone will brave the markets. And if they see an opportunity to return, they will have to do so with fresh fourth quarter numbers, as Q3 figures go stale in the coming weeks. As such it may be a while before the above issuers make a comeback.