BTG Seen Launching Next Week

BTG Pactual has started pre-launch investor education meetings and is heard planning to launch its highly-anticipated IPO as soon as early next week. Based on the typical timetable for Brazilian equity transactions, if the deal is launched next week it would likely price the week of April 23. The deal is expected to raise BRL2.0bn-BRL2.5bn ($1.10bn-$1.37bn), but the markets will have a better idea of the total amount when the price range and number of shares to be sold is disclosed at the time of launch. The BRL2.5bn level would imply a price-to-book valuation of more than 3x, analysts say, well above peers such as Itau and Bradesco. While the consensus may be that the bank deserves a premium for its story and what it has accomplished, 3x-plus may be difficult for buyers to accept given the recent history of IPO pricings in Brazil. A 2.0x price-to-book is normal for retail-plus-investment bank competitors, investors and analysts note. BTG, Bradesco, Goldman Sachs and JPMorgan are managing the deal. Other Brazilians in the pipe could also launch as soon as next week, including fleet outsourcer Locamerica, furniture maker Unicasa, and oil services provider Seabras.