(Repeats to indicate availability of picture) (Recasts lead to describe Alpargatas; adds brand, share performance, details )
By Guillermo Parra-Bernal and Priscila Jordão
SAO PAULO, Nov 23 (Reuters) - J&F Investimentos SA, which manages investments for Brazil’s billionaire Batista family, agreed on Monday to pay 2.67 billion reais ($716 million) in cash for a controlling stake in Alpargatas SA, the maker of the popular Havaianas flip flops.
Under terms of the deal, J&F will pay 12.85 reais per common and preferred share that engineering conglomerate Camargo Correa SA owns in Alpargatas, according to a securities filing. The Batistas will pay Camargo Correa a premium of about 32 percent for its 44.1 percent stake in Alpargatas, a maker of both apparel and footwear.
With the deal, the Batistas, who also control JBS SA , the world’s No. 1 meatpacker, are tapping brands with strong global appeal such as Havaianas, which are widely worn by celebrities. The family, Brazil’s fifth-richest with a fortune close to $5 billion, has diversified from beef into industrial, media and banking businesses in recent years.
The Alpargatas stake sale comes as Camargo Correa seeks to dispose of assets in coming months, a source with direct knowledge of the deal told Reuters earlier this month. Earlier this month, Camargo Correa sold a couple of Alpargatas brands to investors.
The conglomerate’s decision to exit part or all of some non-essential businesses aims to create value for shareholders, and not out of a need to raise cash to cut debt or pay fines related to a massive corruption scandal involving the group’s engineering firms and state companies, the same source said earlier this month.
Should the Alpargatas-J&F deal fail to be finalized within the next 60 days, the final price will be adjusted by the benchmark interbank CDI rate, according to the filing. Under terms of the deal, J&F agreed to keep Alpargatas listed for at least the first year after the acquisition of the stake.
The deal is subject to regulatory approval.
In a separate statement, J&F said there is no set date for a mandatory tender offering to minority shareholders, which triggered an 8 percent plunge in preferred shares of Alpargatas. Its common shares gained 3 percent.
News magazine Exame reported the Alpargatas transaction earlier on Monday, without saying how it obtained the information.
Reuters had reported two weeks ago that potential bidders for the Alpargatas stake included private equity firms Gávea Investimentos Ltda and Apax Partners LLC, as well as rival footwear producer Grendene SA.
$1 = 3.7253 Brazilian reais Editing by Mark Potter, Phil Berlowitz and Leslie Adler