Brasil Travel Shelves IPO Indefinitely

Brasil Travel Turismo e Participacoes has indefinitely postponed its initial public offering, dashing hopes that this issue would kick start the Brazilian IPO market this year. The company was heard citing unfavorable market dynamics. Investors pushed back in what some described as a buyers’ strike after several bids were put in below the BRL1,250-BRL1,650 range.. This comes despite what some thought were already considerable discounts to comparable companies. What this means for other IPO hopefuls remains unclear, but some bankers doubt that much activity will occur over the next month. “There is not much else,” says one banker. “I think it will be another month until we see much else.” The holdco for a nationwide group of travel-related businesses was trying to sell 170,000 primary shares and 466,500 secondary shares. Such a deal would have raised BRL1.21bn ($705m) total size if had priced at the top of the range, or BRL915m at the low end, assuming the use of a 15% greenshoe. Though the management boasts ex-BTG Pactual partner Pedro Guimaraes as chairman and is headed by Paulo Castello Branco, a former VP of Brazilian airline TAM, investors were hesitant about the company’s short operating history. Some of the 35 member businesses have been in operation for years, but they were only assembled into Brasil Travel in March 2011. An expected IPO from travel operator CVC in March or April may also have distracted buyers. Brasil Travel had planned to use the primary proceeds to grow in Brazil and in other countries in LatAm, with about 85% of the funds to be spent on acquisitions. The secondary shares were to be sold by the founders’ holding vehicle, owned by Guimaraes, the Sette family and Jose Marcilio Nunes. Barclays, Credit Suisse, Flow Corretora and Santander were managing the sale.