(Adds share price performance, information from BTG Pactual research note)
PARIS, Dec 4 (Reuters) - French sugar group Tereos said on Friday it plans to make a tender offer for the remaining shares of its Tereos Internacional unit, with a view to delisting it from the Sao Paulo Stock Exchange during the second quarter of 2016.
The unit’s shares soared 130 percent on the Sao Paulo exchange to 51.90 reais. The offer of 65 reais per share is subject to review by an independent appraiser.
“The offer reflects Tereos’ willingness to simplify the group’s legal structure,” Tereos said in a statement.
“In the context of an illiquid market, the aforementioned operation will offer to the minority shareholders an immediate liquidity event should they wish to divest their shares.”
Tereos owns 69.82 percent of Tereos Internacional, which was listed in 2010 and encompasses the French cooperative’s sugarcane, cereals and starch processing operations, including its majority stake in Guarani, a joint venture with Brazil’s state-owned oil major Petrobras.
Sao Paulo-based investment bank BTG Pactual recommended in a research note that investors take part in the tender, even though the sugar and ethanol sector appears ripe for a turnaround after years of low prices.
The bank said Tereos’ proposal offers a return much superior to those from other listed sugar and ethanol companies in Brazil.
Tereos Internacional has faced a severe downturn in Brazil’s sugar and ethanol industry, as sugar prices have fallen to multi-year lows and the government has controlled fuel prices.
The firm's market capitalisation has fallen by nearly 90 percent from a high in 2010, according to Thomson Reuters Datastream. (bit.ly/1NLeGi1)
Parent company Tereos had initially planned a dual listing for Tereos Internacional in Paris and Sao Paulo, but it put off the Paris listing citing unfavourable market conditions.
Profits of Tereos, which is controlled by French sugar beet growers, have fallen on weak sugar and ethanol prices.
It aims to raise sugar output by 20 percent in Europe as the European Union prepares to abolish its sugar quota regime in 2017.
Reporting by Sybille de La Hamaide, additional reporting by Alexandre Boksenbaum-Granier and Marcelo Teixeira; Writing by Gus Trompiz; Editing by James Regan and Mark Potter