Offer represents 5.4% of company’s market cap, making it the largest shareholder
05/23/2023
With Alpargatas shares down more than 50% in a year and a change in management, the Moreira Salles family has decided to increase its bet on the asset by placing a bid that could make it the company’s largest shareholder. The shareholder already forms a controlling block together with Itaúsa.
MS Alpa, an institution controlled by the controlling shareholders of Alpa Fundo de Investimento and Cambuhy Alpa Holding, both owned by the Moreira Salles family, has proposed to buy up to 32 million of the company’s preferred shares for R$10.5 each – a premium of 17.2% over the price of the stock at last Friday’s closing, of R$8.96, and of 27.7% over the weighted average of the last 30 days, but practically half of the price of a year ago, of R$20.76.
The bid represents a total of R$336 million, or 5.4% of Alpargatas’ market capitalization. If the deal goes through, Cambuhy and Alpa Fundo will have a combined share of 33%, or one-third of the company, surpassing Itaúsa, the current owner of the largest stake, with 29.3%. Today, Cambuhy holds 22.7% and Alpa Fundo has a 4.85% stake. Itaú BBA will mediate the offer, which will be valid for 30 days.
After the announcement of the proposal, Alpargatas shares opened Monday’s trading session with a strong rise.
The proposal comes as Alpargatas searches for a new CEO to replace Roberto Funari, who stepped down at the end of April. Board member Luiz Fernando Edmond took over on an interim basis, at a time when the company is trying to return to growth and profitability.
In the first quarter, the company posted a loss of R$199.7 million, reversing the net profit of R$112.1 million reported in the same period last year. In 12 months, Alpargatas has dropped 56.84% in the stock exchange.
After the result, Citi analysts cut the recommendation for Alpargatas to neutral from buy and the target price to R$10 from R$21, seeing the challenges that the company must go through in its restructuring to unlock long-term opportunities. They said that the company has presented successive quarters of results below expectations and that the new management seems to understand that the problem is not only the current macroeconomic issues.
*Por André Ítalo Rocha — São Paulo
Source: Valor International