Previ exits BRF, rejecting Marfrig offer

Previ had been a shareholder since the 1990s, originally through an investment in Perdigão, and remained in the company after its 2009 merger with Sadia. The fund was among the investors dissatisfied with the share swap terms proposed by Marfrig for the merger with BRF, arguing that it secured a better price for its beneficiaries by selling on the open market.

“The shares were sold at a price higher than what would have been offered to minority shareholders through the appraisal rights process if the BRF-Marfrig merger were finalized,” Previ said in a statement, emphasizing its more than 30-year history with the company.

“Previ believes the proposed exchange ratio in the merger does not adequately reflect BRF’s value, potentially leading to losses for minority shareholders and, by extension, for our members. By exiting before the merger’s completion, Previ protects participants’ assets and reaffirms its commitment to technical, well-founded decisions aligned with the best interests of the pension plan,” the statement added.

Previ’s exit rattled investors, with BRF shares dropping 4.55% on B3.

The fund’s departure may weaken the push by minority shareholders seeking better merger terms. Previ, along with asset manager Latache and a member of the Fontana family, had appealed to the Securities and Exchange Commission of Brazil (CVM), successfully delaying the shareholder meeting to vote on the merger twice—the latest postponement, granted last Friday, extended the process by another 21 days.

They are demanding further disclosure of the valuation study underpinning the share price and have also raised concerns about the involvement of Marfrig’s controlling shareholder, Marcos Molina, in the merger vote.

Meanwhile, Marfrig and Mr. Molina continue to buy up BRF shares. The company disclosed that its combined stake, together with Molina’s MAMS fund, has reached 58.87%. When the merger was announced in May, Marfrig held 50.5% of BRF. This increased stake means the merger could be approved even without minority shareholder support.

BTG Pactual has also been purchasing BRF shares in recent days. The bank disclosed it now holds a 7.79% stake in BRF and has derivatives involving call and put options on the stock. BTG did not specify whether the position is proprietary or on behalf of a client.