Redecard Roadshow Heads North

Following two days of roadshows in Brazil at the end of last week, Redecard and its bankers at Itau BBA and Citi arrive this week in New York and London to start US and Europe roadshows. Two separate teams are conducting the simultaneous presentations, says a banker involved. Pricing for the follow-on, which targets a BRL1.89bn raise plus a greenshoe, is set for March 24. Redecard is looking to sell the shares at BRL23, but sales representatives at shops away from the transactions say investors are likely to push for a substantial discount, given the relatively anomalous timing and use of proceeds. The sale is being driven by Citi’s need to divest holdings. The US bank, which holds 17% in the company, is hoping to sell as much as 70% of its stake. Itau Unibanco, which controls just under 47% of Redecard, has the option to acquire an additional 3.6% stake in the company to take it to 50% plus one share. It will likely announce a decision to accumulate this majority ownership just ahead of pricing, says a person on the deal. Bradesco BBI notes that there is a strong bid to borrow Redecard shares in the run up to the offering, which indicates investors are seeking to go short, though there was very limited supply for this purpose.