Claims by lawmakers echo Ban The Batistas movement, whose supporters are not known
23/01/2024
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U.S. senators claim that JBS listing would put shareholders in the country at risk — Foto: Divulgação
After British lawmakers have requested that the U.S. Securities and Exchange Commission (SEC) block the proposed listing of JBS on the New York Stock Exchange, now American senators are trying to stop the Brazilian meatpacker from going public in the country.
In a letter sent to SEC Chair Gary Gensler on January 11th, the senators claimed that JBS listing would put shareholders in the U.S. at risk. They cite a history of “corruption, human rights abuse, monopolization of the meatpacking market, and environmental risks” by the company.
In the senators’ view, JBS listing might also strengthen its market position in the U.S., which they say could harm competitiveness and the country’s farmers and ranchers.
They ask that the SEC evaluate JBS’s draft filing to ensure that the company provided all information required on such sensitive topics. “Should JBS fail to cure any such disclosure deficiencies, we would ask that the SEC decline to declare the company’s registration effective,” they wrote.
The letter cites that, in 2020, JBS holding company J&F Investimentos pleaded guilty in cases of bribery in Brazil and the U.S., including in the acquisition of Pilgrim’s Pride, in 2009. The lawmakers also cited cases of deforestation in the Amazon linked to the sale of cattle to the company.
When contacted, JBS argued that the dual listing would increase scrutiny on the company’s processes, which would have to comply with the standards of the SEC and the New York Stock Exchange. “Stakeholders truly interested in the development and growth of the company and its entire value network support JBS shares listing in New York,” the company wrote in a statement.
U.S. senators’ arguments echo the manifesto by the Ban The Batistas movement, which promises to fight to “protect U.S. farmers, ranchers, consumers, and investors from the risks of an IPO by JBS.” The group also mentions an alleged “unchecked power grab by its majority shareholders, brothers Joesley and Wesley Batista,” who would take advantage of the listing to increase their position in the company to 90%.
According to the Politico website, which specializes in covering U.S. politics, the movement had hired consultancy firm Actum to try and block the IPO. However, it is hard to connect the U.S. lawmakers’ letter to the group—contacted by Valor, the Ban The Batistas movement declined to inform on which organizations, companies, or individuals are supporting and backing the group.
Igor Guedes, a commodities analyst at Genial Investimentos, said that JBS expected to complete the offering in 2023, but the process proved to be more complex than expected. “They are now avoiding giving a new date and frustrating the market, but the chief investor relations officer says it is a matter of time,” the analyst says.
According to him, JBS listing in New York would increase the company’s liquidity in the U.S. market, where investors currently have access to the company’s shares through American Depositary Receipts. “JBS is traded at a value below its U.S. peers, like Tyson, while we think it should be the other way around,” he argues.
Mr. Guedes believes the possible listing may be upsetting members of the U.S. meatpacking industry, as the Brazilian company’s diversified portfolio would give it an advantage over companies that only operate with beef in the U.S. “The capital that filled the gap [in JBS’s market capitalization] in relation to its peers would probably come from those same peers,” he said.
Por José Florentino — São Paulo
Source: Valor International