Brazil's T4U IPO gaining momentum despite election -sources

lunes 22 de septiembre de 2014 16:16 GYT
 

By Guillermo Parra-Bernal

SAO PAULO, Sept 22 (Reuters) - The initial public offering of Brazilian mobile phone tower operator T4U Holding Brasil SA is gaining traction, even as concern over an presidential election in October hampers sentiment ahead of investor meetings, two sources with direct knowledge of the deal said on Monday.

Shareholder D Dots Investments BV and São Paulo-based T4U want to raise about 500 million reais ($209 million) in what could be the first Brazilian IPO since December, said the first source, who requested anonymity because the transaction is in the works. Efforts to contact T4U for comment were unsuccessful.

T4U, which is controlled by Israel's Fishman Group, hired Bank of America Merrill Lynch, Itaú BBA SA, UBS AG and Citigroup Inc to manage the deal. Preliminary investor meetings began on Monday, and formal road shows will start on Sept. 29, the second source noted, adding that pricing is expected on Oct. 16.

The IPO plan, the first to be filed in Brazil in about a year, comes at a time when operators such as American Tower Corp expand in Brazil and demand for high-speed internet spurs the construction of thousands of towers. Mobile phone carriers are selling towers and instead leasing them to preserve cash and profits in a flagging economy.

Growing interest in the T4U deal comes as JBS SA, the world's largest meat packer, decided to put off the 4 billion-real IPO of its pork, poultry and food-processing operations in Brazil last week. JBS and banks are wary that volatility stemming from the most competitive election in 12 years could lead to significant pricing discounts, two sources told Reuters on Friday.

Another company with IPO plans is veterinary products maker Ouro Fino Saúde Animal Participações SA.

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

The benchmark Bovespa stock index closed down 1.7 percent on Monday. The index, which jumped in August, has fallen 5.7 percent since the start of the month, as Rousseff cut into the expected second round lead of opposition candidate Marina Silva.

($1 = 2.40 Brazilian reais) (Reporting by Guillermo Parra-Bernal. Editing by Andre Grenon)