JBS delays $1.7 bln food unit IPO amid market slide, sources say

viernes 19 de septiembre de 2014 18:31 GYT
 

By Guillermo Parra-Bernal

SAO PAULO, Sept 19 (Reuters) - JBS SA, the world's largest meatpacker, has put off a plan to raise 4 billion reais ($1.7 billion) from the initial public offering of its pork, poultry and food-processing operations in Brazil, two sources with direct knowledge of the decision said.

JBS and banks are wary that market volatiltiy stemming from uncertainty about the outcome of Brazil's October presidential election could cloud sentiment ahead of potential investor meetings, according to the sources.

It was the second time São Paulo-based JBS has suspended the deal since June.

Other potential IPOs at risk include those of cellphone tower operator T4U Holding Brasil SA and vet product maker Ouro Fino Saúde Animal Participações SA, which last month announced their plans, both sources said. The offerings were initially set to happen next month, between the first and second rounds of Brazil's most unpredictable presidential election in 12 years.

A number of pension funds and asset management firms are wary over the impact of election-related risks, reduced global liquidity and an economic recession on the future performance of IPOs. The companies pushed forward with the deals after markets rallied in August on speculation that President Dilma Rousseff could lose the October election to a more business-friendly challenger.

The benchmark Bovespa stock index shed 1 percent on Friday. The index, which jumped in August, has fallen 5.7 percent since the start of the month, when Rousseff began to cut into the second round lead of opposition candidate Marina Silva.

"There's too much noise at the moment," said one of the sources, who sought anonymity since the decision is private.

The last time a Brazilian company listed shares on the São Paulo Stock Exchange was December 2013, when travel agency CVC Brasil Operadora de Turismo SA raised 540 million reais from investors. This year, IPOs in Brazil are likely to have their worst year in at least a decade.   Continuación...