July 6, 2017 / 7:14 PM / a year ago

UPDATE 1-Brazil's Unipar jumps as holder Barsi balks at low-priced tender

(Adds share performance, background throughout)

SAO PAULO, July 6 (Reuters) - Shares of Unipar Carbocloro SA jumped on Thursday after a renowned local investor urged other minority shareholders to rebel against terms of a management-led tender, fanning hopes that the proposal could be sweetened or dropped.

In a Thursday letter sent to some shareholders, investor Luiz Barsi said Unipar’s planned buyout of minority shareholders at 7.50 reais a share is below the stock’s fair price. He urged fellow shareholders to set their asking price in the tender at 30 reais, which would be a way of rejecting it.

Barsi, one of Brazil’s most successful individual investors, said in the letter that he could add holdings of Unipar’s common shares at a price above current market levels. Efforts to contact Barsi for comment were unsuccessful.

Earlier in the day, Barsi, 78, quit as a member of Unipar’s board, two people familiar with his decision said. The people said Unipar would soon inform regulators of Barsi’s decision.

The company did not comment.

The rift underscores how Brazil’s vague rules governing tender offers give companies and their controlling shareholders the upper hand in such deals. Recently, rising political turmoil drove shares down, giving controlling shareholders a chance to assert their control for cheap at the expense of smaller holders.

Class A preferred shares of Unipar rose as much as 5 percent after the letter was sent, on bets Barsi’s drive has increasing chances of success. Unipar’s common shares added up to 6.2 percent in the São Paulo Stock Exchange.


“I took offense of this tender proposal to minority shareholders, because I undoubtedly believe that the company’s stock price is way above the one offered,” Barsi said in the letter.

This is not the first time that Unipar has attempted to go private. Two attempts to delist in 2015 and 2016 floundered, after failing to win support from than two-thirds of outstanding shareholders.

According to Barsi’s letter, to which Reuters had access, Unipar’s recent purchase of Solvay Indupa SA could help revenue top 2.3 billion reais ($697 million) annually. He said the book value of Unipar’s stock is currently 14.50 reais.

Under terms of the proposal, which was made public late last month, Unipar would pay 7.5 reais per share, of which 5 reais would be paid in cash, net of dividends, and the remaining 2.50 reais would be paid over four years. ($1 = 3.3011 reais) (Reporting by Guillermo Parra-Bernal; Editing by Frances Kerry and Jonathan Oatis)

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