SAO PAULO, May 24 (Reuters) - Shares in Brazil’s Alpargatas SA, the maker of Havaianas flip flops, gained on Wednesday, bolstered by reports from Reuters and elsewhere it was among assets that scandal-hit parent company J&F Investimentos SA had considered selling.
Alpargatas shares were up 8 percent in afternoon trading after Reuters reported that J&F, which also owns the world’s largest meatpacker JBS SA, had considered selling the shoe and sportswear maker earlier in the year.
Banco Bradesco SA’s investment banking unit, which J&F hired to help it sell another asset, dairy company Fábrica de Produtos Alimentícios Vigor SA, had also been advising the family on plans to merge Alpargatas’ different classes of stock into common shares, three people with direct knowledge of the situation told Reuters on Tuesday.
Alpargatas said late on Tuesday that plan had been scrapped. Moves to cancel such share restructurings at Brazilian companies have in the past been preludes to asset sales.
Alpargatas, which J&F acquired from construction conglomerate Camargo Correa SA two-and-a-half years ago for 2.7 billion reais, could easily attract suitors and may now be worth more than 3 billion reais, one of the people with knowledge of the situation told Reuters.
In a securities filing late on Tuesday, Alpargatas said JBS Chairman Joesley Batista, who turned a regional slaughterhouse into a global empire with the help of government loans, was resigning from Alpargatas’ board.
JBS shares were little changed after rallying on Tuesday.
Batista made headlines last week for recording Brazilian President Michel Temer appearing to back JBS’s payment of bribes to a jailed politician. Temer has come under pressure to resign but he has denied the allegations and insisted he will not step down voluntarily.
“Asset sales by J&F could bolster its cash situation, indirectly helping JBS,” an equities trader from a major foreign bank said. “Still, there’s a lot of uncertainty over what could be sold and for how much.”
J&F Investimentos said late on Tuesday it was continuing to negotiate a plea bargain deal with Brazilian prosecutors to settle charges it bribed scores of politicians including Temer.
The Wall Street Journal reported on Wednesday that J&F was now willing to pay at least $1.3 billion as part of a settlement, up from the 1 billion reais ($305.52 million)it initially proposed. Prosecutors have asked for 11.2 billion reais.
J&F said it would not be commenting on the plea bargain until an agreement was reached. ($1 = 3.2731 reais) (Reporting By Bruno Federowski; Writing by Christian Plumb; Editing by Andrew Hay)