On September 27, Enesa Participações became the latest Brazilian company to pull an IPO. However, a couple of days after that announcement Colombia’s Grupo Exito completed a successful Ps2.5 trillion ($1.3 billion) follow-on to highlight the country’s strongly performing equity market.
Grupo Exito, a Colombian supermarket chain, reported 1.7 times oversubscription for its sale of 114.3 million shares, which had been priced at Ps21,900 three weeks before the sale, an 8% discount to the Ps23,800 average price over the one-month period before the launch. The equity sale was conducted to raise funds for retail expansion in Colombia and to pay for the acquisition in June of a supermarket business in Uruguay.
Difficult weeks
"For us, the result is a true demonstration of the interest that exists for our company, taking into account that right now there is an adverse economic climate and these weeks were difficult for Latin American markets," said Gonzalo Restrepo López, president of Grupo Exito, in a press release. Credit Suisse, Citi, JPMorgan and Santander led the international part of the Exito sale, with Corredores Asociados managing the domestic portion.
The continuing stream of deals in Colombia – Exito follows recent transactions for Nutresa, Davivienda, Conconcreto, Avianca-Taca and Grupo Aval that were all well oversubscribed – is in stark contrast to the inactivity in the Brazilian market. Telecoms company TIM Participações is scheduled to conduct a R$1.85 billion ($998 million) follow-on in early October. However, with its parent company, Telecom Italia, expected to exercise its subscription rights, less than R$610 million-worth of new shares are expected to be sold into the market. Should this deal proceed it will be the first since July 2011.
