Latin Finance - May/June 2010 - 8

Equity

Buyers Clash With Investors

Hypermarcas was able to raise 1.23 billion reais, in line with expectations. Plenty more is in the pipe in Brazil, but investors may be The number of interested issuers suggests a bumper volume reserving space during the ﬁrst half for and expected deluge year to rival 2007. However, primary issuance from Brazil from state owned entities later in the year. Petrobras plans continues to disappoint buyers skeptical of inﬂated valuations. a secondary o er expected at $15 billion to $25 billion. “You have a lot of interesting Company o cials were hopeful that and attractive companies wanting legislative approval could come this ECM Rank by Volume, Year to April 16 to do IPOs, but it is a question of month with a sale 60-90 days later, Itaú tops the charts pricing,” Guilherme Rebouças, but as of mid-April the timing looked Rank Bookrunner Value $m # deals head of di erentiated funds at Itaú uncertain. 1 Banco Itaú 1,332.68 9 Asset Management, which manages Banco do Brasil has teed up an 2 Credit Suisse 1,068.09 7 12 billion reais in equity, tells o ering of up to 286 million shares, LatinFinance. Companies want to sell 3 BTG Pactual 1,037.44 7 an o er that would raise in the at high prices, he explains. However, neighborhood of 8.75 billion reais. 4 Bradesco 636.92 5 such lofty valuations might have been Utility Eletrobras is rumored to be 5 JPMorgan 410.12 4 possible in 2007, but buyers are more eyeing its own share o ering worth 6 Morgan Stanley 380.70 2 skeptical now, resulting in a period of up to 20 billion reais. 7 Celﬁn Capital 374.61 1 readjustment. 8 Santander 363.76 4 Eike Batista’s OSX is a good 9 Goldman Sachs 350.32 3 example of an enterprise that may Mexico’s small and mid-caps are 10 Citi 251.05 2 bring excellent results in the long term, lining up to bring the ﬁrst new IPO 10 BofA-Merrill 251.05 2 but investors are not willing to pay for since Genomma Labs in June 2008. Subtotal 6,456.75 15 that potential, Rebouças explains. OSX, Legal changes giving the country’s one of the most anticipated deals of the Total 7,536.63 16 pension funds more ﬂexibility in year raised 2.82 billion reais, 62% less investing in IPOs have opened the Source: Dealogic than hoped for. door, particularly for smaller issuers. The shipbuilder with untested Grupo Comercial Chedraui, IB Rank by Fees*, Year to April 16 earnings potential and no positive a family-owned operator of Credit Suisse takes strong lead Ebitda since inception priced at 800 supermarkets, hypermarkets, and Rank Bookrunner Revenue $m % Share reais per share, below the 1,000-1,333 warehouse stores in southeastern 1 Credit Suisse 66.19 15.97 real range, and traded close to 600 Mexico was eyeing the end of April 2 Banco Itaú 53.81 12.98 reais mid-April. Credit Suisse, Itaú for a sale that could raise as much BBA, Bradesco BBI, BTG Pactual and 3 BofA-Merrill 34.96 8.44 as 6.18 billion pesos. The operator Morgan Stanley led the trade. Market of the Chedraui and Super Chedraui 4 JPMorgan 34.49 8.32 conditions led Batista to pull a planned chains in Mexico and El Super in the 5 BTG Pactual 27.89 6.73 listing of his EBX holding company, US is eyeing a 32-40 peso range for 6 Deutsche Bank 23.10 5.57 which bankers had expected to raise the primary and secondary o ering. 7 Citi 20.63 4.98 around $30 billion. Citi-Banamex, BBVA Bancomer and 8 Bradesco 20.02 4.83 Developer BR Properties also Credit Suisse are leading. 9 Goldman Sachs 17.79 4.29 joined the list of issuers pricing below Mexican Brokerage Actinver is 10 Santander 17.39 4.19 the target range, raising 1.07 billion meanwhile planning to raise 745Subtotal 316.27 76.31 reais at 13 reais per share, below 901 million pesos from a domestic the 14-18 reais target. Julio Simões Total 414.47 100.00 IPO, according to regulatory Logistica could only muster 8.0 reais, *M&A, ECM, DCM, & Loans documents. The sale of 65.3 million Source: Dealogic below a range revised down to 8.50 to primary and 13.1 million secondary 9.00 reais, in its 454 million real o er, shares – representing about a 15% from an initial 10.75-13.75 target. stake – is expected to price in May Toll road concessionaire Ecorodovias and builder Mills o ered within a stated range of 9.50-11.50 pesos. encouragement in at least scraping the bottom of their ranges, And companies ﬁnding themselves at the back of the line to to raise 1.36 billion reais and 685.7 million reais, respectively. issue on the Certiﬁcados de Capital de Desarollo (CCD) market With investors preferring a tangible track record, it is no are also opting for IPOs, with the ﬁrst two coming as soon as surprise that follow-on o erings have fared better. Developer May. Developer Tres Marías plans to raise up to 1.0 billion Even Construtora e Incorporadora raised 506 million reais, pesos in a deal through Ixe. Teak wood grower Proteak plans to following a reduction in its target to 482 million reias from 632 raise a similar amount to fund its business plan, with Bulltick million reais at announcement, as its price declined. Retailer managing the sale. LF

Mexican Comeback

8 LATINFINANCE

May/June 2010

Latin Finance - May/June 2010

Table of Contents for the Digital Edition of Latin Finance - May/June 2010