LatinFinance - March/April 2013 - 9

Equity

A price to pay
its strength during downturns – with a focus on providing
The equity markets got off to a better start this year than last,
cloud-based and on-site resources for Brazil’s retail sector. The
but the results have so far been mixed. Optimists’ mantra that
transaction priced at the top of the range, as investors showed
markets are open for the right names at the right price proved to
none of the skepticism that has characterized smaller Brazilian
be true in the first weeks of the year.
IPOs in the past few years. BTG Pactual, Credit Suisse, Itaú and
Investors are still showing keen interest in Mexico. The Fibra
Morgan Stanley managed the sale.
Uno real estate trust raised 22.05 billion pesos ($1.73 billion) in
Education operator Estácio raised $377 million through an
its second equity follow-on, with books multiple times subscribed.
equity follow-on in late January, conceding a 6.4% discount.
The issuer priced at a 4.1% discount and became the first
The oversubscribed transaction raised funds for acquisitions and
Mexican issuer to exercise a hot issue – a 20% overallotment at
organic expansion. Bank of America Merrill Lynch, Credit Suisse
the issuer’s discretion.
and Itaú led the transaction.
“We are seeing a lot of new investors coming in,” Javier
It was not all good times in Brazil, though, as the market also
Elizalde, CFO of Fibra Uno, said. International investors in
saw its first pulled deal. Brazil’s Queiroz Galvão had to put off the
particular are becoming more comfortable with the asset.
US IPO of its QGOG Constellation due to poor demand in early
More than 100 international accounts participated, with an
February. No Brazilian oil services
average ticket of $30 million, an
firm has listed in two years, and
increase from just 12 such buyers in
ECM rank by volume, year to February 15
poor performance from listed peers
the 2011 IPO at average tickets of $7
CS takes early lead
has not helped. QGOG had been
million. Foreign buyers bought 60%
targeting $600 million. JPMorgan,
of the offering, up from 23% in the
Rank
Bookrunner
Value $m
# Deals
Bank of America Merrill Lynch, and
IPO. Credit Suisse and Santander
1
Credit Suisse
1,367
6
Itaú were global coordinators, with
were global coordinators, joined by
2
Itaú
882
3
Credit Suisse and Bradesco as joint
bookrunners BBVA and Evercore.
3
Santander
816
2
bookrunners.
As of late February, Fibra Inn
4
BTG Pactual
406
4
Jamaica’s National Commercial
was preparing a second Hotel-based
5
Morgan Stanley
281
3
Bank (NCB) also pulled a transaction
Fibra, and Prudential had filed for
6
Citi
236
1
that would have been the debut of its
an industrial Fibra.
7
BBVA
217
2
ADRs. The bank was seeking more
Demand was there for Carlos
8
Evercore
173
1
than $200 million to fund growth.
Slim’s Grupo Sanborns as well,
9
Inbursa
168
2
JPMorgan and Macquarie were
though the retail operation carved
managing.
out of Grupo Carso had to price
10
BAML
113
2
In Chile, CorpBanca wrapped up
near the bottom of its price range.
Total
4,844
13
the international equity portion of its
The $950 million-equivalent sale
Source: Dealogic
Colombian acquisition funding. The
was twice subscribed, and gave
$158 million transaction was four
investors much-craved exposure
times subscribed. A domestic rights offering was to follow, and
to the retail sector. Sanborns is raising funds for expansion and
was expected to bring the total to $660 million-equivalent. BTG
working capital. It owns the well-known Sanborns stores, as well
Pactual is managing.
as other brands including Sears and Saks Fifth Avenue. Most are
Issuers will have to tread carefully going forward. Investors
in Mexico, but it also has operations in El Salvador and Panama.
are picky about Brazilian issuer types, while Mexican firms need
Inbursa and Credit Suisse were global coordinators, with Citi,
to be sensitive to the market views of their value. In Brazil, Banco
Morgan Stanley and Santander serving as bookrunners.
do Brasil is preparing the IPO of its BB Seguridade insurance
Similarly, investors expressed their skepticism over Mexican
unit, and Gol is expected to IPO its Smiles frequent flyer
valuations in a $310 million-equivalent deal from Pepsi
program. Also, financial IT specialist Senior Solution hopes to
bottler Cultiba. In a new IPO, the issuer formerly known as
capture some of Linx’s magic as it prepares to list on the Bovespa
Embotelladoras Unidas came at the bottom of its price range.
Mais small cap platform.
International buyers bought about 40% of the offering. Cultiba
 In Chile, Enersis initiated in late February the preferential
raised cash to repay bank loans and for investment. Bank of
leg of its controversial $6 billion capital raise, now that minority
America Merrill Lynch, Banorte-Ixe, BBVA Bancomer, Credit
holders have agreed on valuation. The sale was to include a US
Suisse, Inbursa and JPMorgan managed.
ADR portion. LF

Brazilian IT rush

Brazilian IT provider Linx shocked markets when it attracted
20 times demand for its 528 million real ($265 million) IPO.
Investors bought in to the issuer’s growth plan, which combines
the defensive nature of IT – peer Totvs has been popular for

UPDATE

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March/April 2013

LatinFinance 9
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LatinFinance - March/April 2013

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