UPDATE 4-Brazil's Kroton close to clinching $1.7 bln deal for Estácio

viernes 1 de julio de 2016 16:40 GYT
 

(Adds Ser Educacional's reaction, background)

By Tatiana Bautzer and Juliana Schincariol

SAO PAULO/ RIO DE JANEIRO, July 1 (Reuters) - Brazil's No. 2 for-profit college operator Estácio Participações SA said on Friday its board accepted financial terms of an improved takeover bid from larger rival Kroton Educacional SA worth 5.5 billion reais ($1.7 billion), nearly ending a month-long battle.

Kroton, the world's largest education company by market value, said in a filing it had offered a swap ratio of 1.281-to-1 for Estácio's shares as well as a one-off cash payment of 170 million reais ($52.84 million), equivalent to roughly 0.55 reais per Estacio share.

The stock swap ratio was only 2 percent higher than the previous Kroton proposal, equivalent to 1.25 shares of Estacio.

Estácio said its board had agreed at a meeting on Thursday to the financial conditions of Kroton's new offer, pending the negotiation of operational terms of the agreement between the two companies and the regulatory authorities' approval.

The board will meet again on July 8 to review the terms of the merger and, if all the conditions are agreed on, call for a shareholders' assembly to approve the proposal.

Kroton shares closed up 5.4 percent at 14.34 reais in Sao Paulo. Estácio shares gained 1.95 percent to close at 17.29 reais.

The deal could unleash a wave of mergers in Brazil's education sector, underscoring the resilience of for-profit college operators during a two-year recession in which student delinquencies have risen and the government has slashed funding for student loans.   Continuación...