A Brazilian Stock Is Up 11 Percent Amid the Global Selloff
A Brazilian Stock Is Up 11 Percent Amid the Global Sell-Off
(Bloomberg) -- As most stocks struggle to stem a global selloff that wiped about $1.25 trillion off U.S. equities on Monday, one Brazilian company is enjoying a double-digit rally.
Investors are piling into Sao Paulo-based wood manufacturer Duratex SA, which announced February 5 that rival Suzano has agreed to buy about 9,500 hectares of rural areas and the forest assets they contain for 308.1 million reais. Suzano was also given an option of acquiring an additional batch of land for 794 million reais.
That’s great news for the company, say Morgan Stanley analysts, who point out that on top of the 500 million reais profit, the sale deleverages the company and leaves the door open to other strategic moves in the future, creating a major windfall. Even with the sale to Suzano, Duratex will continue to have an excess of forest, so it should remain self sufficient in wood while it could sell more of its forest and land in the future.
The company has five buys, four holds and one sell recommendation, according to Bloomberg data.
To contact the reporters on this story: Carolina Millan in Buenos Aires at cmillanronch@bloomberg.net, Paula Sambo in Sao Paulo at psambo@bloomberg.net.
To contact the editors responsible for this story: Arie Shapira at ashapira3@bloomberg.net, Morwenna Coniam
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