Mexico's Billionaire Coppel Family Said to Plan $2 Billion IPO

(Bloomberg) -- Mexico’s billionaire Coppel family hired Morgan Stanley and Bank of America to lead an initial public offering of its conglomerate Grupo Coppel, according to people with knowledge of the matter.

Coppel, which operates department stores, banks and a pension fund in Mexico, is seeking to raise as much as $2 billion, said the people, who asked not to be identified because the plans aren’t public. That would make it the largest Mexican IPO since the local unit of Banco Santander offered shares in 2012.

While no official offering date has been set, the deal could come as early as this year, one of the people said. Mexico is gearing up for a politically fraught period with a new government set to take over after the July 1 presidential vote. The leftist Andres Manuel Lopez Obrador, known as Amlo, has a huge lead going into the election, raising concern among investors who fear his populist plans for more government spending could boost deficits.

“The uncertainty of an Amlo presidency may inspire some business owners to try to cash in ahead of the transition," said Greg Lesko, a portfolio manager at Deltec Asset Management in New York.

Lopez Obrador has tried to bolster his market credentials by reaching out to the business community directly, and has softened his tone on some of his more controversial proposals.

Coppel’s department stores cater to lower-income consumer who often buy on credit. The group may post net consolidated income of as much as $1.15 billion this year, said one of the people who asked not to be identified. Shares of the company used to trade on the Mexican stock exchange, but it delisted in 2007.

Morgan Stanley and Bank of America will serve as global coordinators for the offering on Mexico’s stock exchange. JPMorgan and Santander will serve as bookrunners, while Lazard was picked as an adviser, according to people with knowledge of the deal.

A Coppel spokeswoman didn’t respond to an email and phone call seeking comment. Representatives for Morgan Stanley didn’t immediately comment, nor did Lazard’s press office. Bank of America and Santander declined to comment, as did JPMorgan.

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