Long Awaited Mexico IPO Surfaces

The Bolsa Mexicana de Valores (BMV), Mexico’s equity and futures exchange, is set to launch an IPO as early as next week, according to people close to the issuer. The peso equity offering – a rare occurrence, many months in the pipeline – could raise $400m-$500m equivalent, and represents a significant landmark for Mexican equity markets – in the same way Bovespa and BM&F were flagship deals for Brazil. The stock market has been taking its time reorganizing its ownership structure, among other things. Bankers away from the process say it was complicated by the dozens of brokerages with stakes in the Bolsa wanting to participate in distribution of the shares. That could result in a highly atomized book, especially given Mexico’s large retail investor base, says a banker at a competing shop. The Bolsa is heard targeting a PE valuation similar to the Bovespa and the BM&F. But investors and bankers away from the deal say that would be a mistake. The two countries’ equity markets are vastly different, especially in daily trading volume, a key measure in determining valuation. UBS is leading the deal, and may be joined by co-managers. Pricing is expected by mid-June.