Via Varejo Targets BRL3bn-plus

Via Varejo has launched its equity follow-on, aiming to raise more than BRL3bn ($1.3bn) before the final issuance widow of 2013 closes. The Brazilian retailer plans to set a price December 12 for the all-secondary sale representing the debut offering of units consisting of one of the retailer’s already trading common shares and two of its preferred shares. The operator of retail operations including the Casas Bahia and Ponto Frio chains is offering 123.7m secondary units, assuming a 15% greenshoe is included, at BRL29.60-BRL33.60 each, meaning a BRL3.66bn deal at the midpoint. Via Varejo is setting a price given the involvement of the preferred shares and illiquidity of the common shares. Common shares closed at BRL31.00 Monday, or BRL7.75 following a 4-for-1 split approved last week. The controlling Klein family is offering 80.7m units in the base deal, and fellow Brazilian retailer Compnahia Brasileira de Distribuicao (CBD) is offering 26.9m. Bradesco, Bank of America Merrill Lynch and Credit Suisse are leading, with Goldman Sachs, Itau, JPMorgan, Santander and UBS as bookrunners. The transaction should result in a 29.3% free float, according to a prospectus, with CBD holding 43.3% and the Kleins 27.4%. The issuer will have size and recognition on its side, two factors that have helped a few Brazilian deals – notably BB Seguridade – price this year amid volatility and negative sentiment towards Brazil. Travel services provider CVC is scheduled to provide a test of appetite December 5, when it prices an all-secondary IPO targeting more than BRL700m.