November 18, 2019 / 2:46 PM / 19 days ago

UPDATE 1-Shares of Brazil's Marfrig rise 5% after National Beef deal

(Adds share performance, analyst report)

SAO PAULO, Nov 18 (Reuters) - Shares of Brazilian food processor Marfrig Global Foods SA rose 5% in morning trading in Sao Paulo after the company announced it raised its stake in U.S. meatpacker National Beef Packing Company to 81.7% from 51%.

Marfrig acquired the stake from Jefferies Financial Group Inc for $860 million. Including dividends relative to this year, Jefferies will receive a total of $970 million.

Analysts at BTG Pactual wrote the deal was positive and raised the target price for the shares to 12 reais. In early morning trading, Marfrig common shares were up 4.8% at 10.95 reais.

BTG analysts led by Thiago Duarte said the deal gives Marfrig more flexibility to use the “massive cash flow generated by National Beef without the limitations of the shareholders agreement and mandatory dividends to minorities.”

Analysts said the dividend policy remains in place, but Marfrig has now a better chance to change it.

The transaction is expected to conclude this year. After the acquisition, other shareholders in National Beef will be USPB, with 15%, BPI, 2.4% and Tim Klein, 0.8%. (Reporting by Tatiana Bautzer and Paula Laier, editing by Louise Heavens and Steve Orlofsky)

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