The proposal increases to R$47 per share from R$40
The negotiation to sell petrochemical Braskem got hectic again — still before the outcome of Brazil’s presidential elections, which were being pointed out as a milestone in Novonor’s (formerly Odebrecht) calendar. Valor found out that U.S.-based asset manager Apollo Global presented last week a new proposal to buy 100% of the petrochemical company, at R$47 per share.
According to sources close to the negotiations, the bid, which evaluates Braskem at around R$37 billion — considering 100% of its capital — is being formalized with Novonor.
The first offer made by Apollo, at R$40 per share, was considered too low by both the controlling shareholder and the creditor banks, which hold the petrochemical company’s shares as a guarantee for the debts of former Odebrecht. Other interested parties also came to formalize offers, but none pleased the sellers.
A source says that Apollo had indicated in informal talks the new price and would already be formalizing the proposal. Other potential buyers, including Unipar and BTG Pactual, did not make new offers. Unipar would still be interested in Braskem’s assets in São Paulo, in an operation with a price equivalent to R$60 per share.
In reaction to the news about the sale process, Braskem shares rose 20.4% on Tuesday on B3, the highest on Ibovespa, traded at R$33.58 each. Still, they are far from the R$55 seen at the beginning of this year. According to analysts consulted by Valor, in addition to uncertainties about the company’s sale process, which will not be immediate, the prospect of a downturn in the global petrochemical cycle will continue to punish the stocks.
Apollo is interested in the stakes held by Novonor and Petrobras in the Braskem. In addition, it plans to make a public offering for the outstanding shares, taking the company private in Brazil.
According to a source close to the sale proceedings, Apollo has conditioned its offer on due diligence and one of the most critical points, for the manager, would be Braskem’s situation in Alagoas. Although the petrochemical company has advanced a lot in the negotiations with authorities about soil sinking in Maceió — linked to its old rock salt operation, the understanding is that there are still risks, including financial ones. Along with the second-quarter results, the company updated the amount provisioned to cover expenses with the geological problem, bringing the account to R$12.9 billion so far.
Apollo, Novonor, and Unipar declined to comment.
For BTG Pactual analysts, Apollo’s new offer is positive and represents a substantial premium over the share price. Still, the bank points out that the negotiations are still expected to take a long time.
Analysts Pedro Soares and Thiago Duarte point out that Novonor’s debt with creditor banks is around R$14 billion. In the values of the new offer — of R$50, considering the price informed by the columnist Lauro Jardim, with daily O Globo, which reported first-hand that Apollo had presented a new bid — Novonor would raise R$15.3 billion with the sale.
After discounting the taxes on the capital gain of more than R$1.6 billion, the net amount received would be below the amount necessary to fully cover the debt. “We believe that creditors will play an important role in the final terms of any proposal, so the current value suggests that negotiations are unlikely to be as direct and may last a bit longer,” they wrote.
Still, for the bank, the investment thesis remains unchanged with or without a proposal, reflecting a company that currently has a more diversified portfolio and the capacity to generate cash even under the current adverse macroeconomic conditions. BTG Pactual has a buy recommendation for Braskem, with a price target of R$68.
(Felipe Laurence contributed to this story.)
*By Stella Fontes, Mônica Scaramuzzo — São Paulo
Source: Valor International