Creditor banks asked Apollo, BTG and J&F to improve their bids; Unipar and Ultra still interested
09/02/2022
J&F, the investment holding company of the Batista family, is studying a proposal to buy 100% of Braskem, sources say. This week, J&F executives with the syndicate of creditor banks of Novonor (ex-Odebrecht), whose shares are used as a collateral, met with executives from U.S. asset manager Apollo, BTG Pactual and J&F to let them know their bids had been rejected.
BTG and J&F were willing to buy the debt of the creditor banks, which today totals R$15 billion, but asked for a large discount. Apollo placed an offer of R$45 per share and would be willing to buy 100% of the company, but said that the exit of Petrobras is a condition for completing the deal. The banks are not willing to grant large discounts on the total value of the debts. As for Apollo, they understand that the value of R$45 per share and the conditions imposed by the asset manager also present risks.
Unipar and Ultra, in partnership with Lumina, Daniel Goldberg’s asset management company, have made a proposal to Novonor in a different format. While Unipar offered R$10 billion for Braskem’s assets in São Paulo, the consortium between Ultra and Lumina proposed three months ago to invest R$1.3 billion in the company, joining the controlling group formed by Novonor and Petrobras. According to the proposal, the consortium would reach a 51% stake in about three years.
Sources linked to the creditors see Unipar and Ultra’s proposal as “complex” and say that they have no interest in taking them forward at this moment. Valor found out that in August Messrs. Goldberg and Lutz went to the Brazilian Development Bank (BNDES) to better explain the offer they made three months ago, and that they had a strategic plan for the group, but that the bid had been rejected. For now, Ultra and Lumina are not willing to review the proposal.
The creditor banks (Banco do Brasil, BNDES, Bradesco, Itaú and Santander) are in no hurry to close the deal — and are not ruling out giving a new waiver to Novonor to discuss the best way to close the sale of Braskem, a source familiar with the matter said. The expectation is that after the elections the market will improve again, and the shares of the petrochemical company will recover.
Sources linked to J&F told Valor that they may review the proposal and are willing to buy 100% of the company. Aguinaldo Filho and Joesley Batista met personally with those involved in the discussions with the banks and are committed to presenting “a more aggressive offer.”
Sources familiar with the matter say that Novonor is still resisting selling its entire stake in the business and has shown interest in remaining a minority shareholder in the petrochemical company.
At this moment, there are no advanced negotiations with interested buyers, although some of them, including Apollo and J&F, have requested exclusivity in the talks. Both requests were rejected.
Valor found out that BNDES and Itaú were interested in Apollo’s proposal since the company would not need to finance itself to bank the offer. However, the other banks argue that they would be tied for up to 18 months until the agreement, which involves minority shareholders, is concluded, and run the risk of the deal not being carried out.
In the specific case of J&F, the state-owned banks are resistant to doing business with the Batista family, according to sources, because of the crisis generated in Brazil after the Joesley Day – the scandal triggered when the tycoon turned state’s evidence, in 2017. In the financial market, sources believe that the group is able to put together a better proposal. The litigation of the holding in Eldorado, with the partner Paper Excellence, is also considered a sensitive point.
BTG, on the other hand, besides asking for a large discount, wants to pay for the purchase over the next seven years.
Although the price offered by Unipar includes a considerable premium in relation to Braskem’s market capitalization, the sliced sale is the least interesting option at this moment.
The petrochemical company closed at R$30,43 on Thursday, a slight drop of 0.07%. In the year, however, the devaluation is 45%. The group’s market capitalization is R$26.4 billion, according to Valor Data.
Bradesco, BB, BTG, Santander, Unipar, Ultra, J&F and Petrobras declined to comment. Apollo and BNDES did not immediately reply to requests for an interview.
*By Stella Fontes, Mônica Scaramuzzo — São Paulo
Source: Valor International