SAO PAULO, Sept 3 (Reuters) - JBS SA, the world's largest meatpacker, is resuming a plan to raise 4 billion reais ($1.8 billion) from the initial public offering of its pork, poultry and food-processing operations in Brazil as early as next month, a source with direct knowledge of the deal said on Wednesday.
São Paulo-based JBS put off the deal in June, when slumping confidence drove potential investors away from Brazil, sources told Reuters at the time. JBS and banks want to kick off investor meetings in New York and other cities next week, said the source, who sought anonymity since the deal is in the works.
The transaction could be priced after the second half of October, between the first and second rounds of Brazil's presidential election, the source added. In recent weeks, cellphone tower operator T4U Holding Brasil SA and vet product maker Ouro Fino Saúde Animal Participações SA filed for IPOs, as demand for Brazil issues gain traction amid speculation that market-friendly candidates could win the election.
"Timing will be crucial for the deal," the source added. Itaú BBA SA, Banco Bradesco BBI and Bank of America Merrill Lynch are among the group of at least five banks that have been mandated for the transaction, the source added.
JBS declined to comment, citing a quiet period.
The unit, which will be spun off under the name of JBS Foods, accounted for nearly 10 percent of JBS's $40 billion in revenue last year. JBS aims to list the unit in the São Paulo Stock Exchange's Novo Mercado chapter, where corporate governance rules are the toughest and requires that a company list at least 25 percent of its shares.
Last year, JBS acquired rival Marfrig SA's Seara pork and poultry operations for $2.7 billion, and assets from Canada's XL Foods and Brazil's Massa Leve for a combined $210 million.
Prospects for Brazil's equity markets and stock offerings have been gloomy this year, partly because of political uncertainty related to the election, bankers and investors say.
Stung by a string of deals in recent years that failed to deliver the promised returns, investors have become especially cautious in Brazil. About 40 of 117 IPOs priced since 2005 yielded returns above the benchmark CDI interbank lending rate, with the remainder losing on average half the amount initially invested, Credit Suisse Group AG and Thomson Reuters data said.
Despite the adverse outlook, equity investors still keep a watchful eye on Brazil because the country's stock market is bigger, more liquid and more diverse than those in the rest of the region, bankers said.
$1 = 2.24 Brazilian reais Reporting by Guillermo Parra-Bernal; Editing by Bernard Orr