Brazilian Bank Eyes Options to Unload $4 Billion Stake in JBS
(Bloomberg) -- Brazil’s state development bank is weighing options to unload $4 billion in JBS SA stock rather than just selling the stake through a public offering as shares in Brazilian meatpacker soar, according to people familiar with the matter.
BNDES, which hired banks almost two years ago to manage a potential public sale of its JBS stake, scrapped a plan to focus solely on a public sale since the state-owned entity also wants the flexibility to pursue a block trade deal or sell shares in the market, said the people who asked not to be identified because they’re not authorized to speak on the plans.
The sale of the JBS stake has been expected as part of the broader bank’s plan to exit investments in private companies to replenish state coffers. BNDES is reviewing its alternatives as JBS shares trade near record highs, with analysts anticipating strong results for the company in the short term given a mismatch between low beef supply and very strong demand. Separately, JBS has been looking at options for listing shares in the U.S.
The development bank informed JBS of its decision to cancel the public sale first proposed in late 2019 in a Thursday letter, the Sao Paulo-based company said Friday in a statement. JBS declined to comment on the matter, saying all the information was published in a notice to the market earlier Friday. BNDES’s full stake is currently valued at about 21.6 billion reais ($4.0 billion), according to Bloomberg data.
The withdrawal of the public sale is a formality for a process that had already been suspended, BNDES said Friday in an email. Banks hired for that public offering included Bradesco BBI, BTG Pactual, Bank of America, Itau BBA and UBS Brasil Corretora. The bank said it constantly monitors market conditions and possible transactions that are in line with its goals.
“With shares at all time high, the divestment of BNDES seems to be a matter of timing,” Victor Saragiotto, an analyst at Credit Suisse, said in a note. “We wouldn’t rule out BNDES using other mechanisms to exit from JBS.”
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