The uneven performance of Latin American IPOs continues following mixed fortunes for recent transactions. Argentina’s Arcos Dorados, an operator of McDonald’s franchises, burst through its initial price range of $13 to $15 to price at $17 before trading up to close to $25. In Brazil, however, two recent IPOs marketed to investors via the Bovespa index demonstrate that IPOs within the region face more cautious investor sentiment.
Arcos’s listing on the New York Stock Exchange, which was managed by Bank of America Merrill Lynch, JPMorgan, Morgan Stanley, Banco Itaú and Citi, tapped strong investor interest in Latin American consumer-based equities and the deal was reportedly more than 10 times oversubscribed. Hedge funds, notable by their absence in other Latin American IPOs, were said to be investing in the deal, which raised $1.25 billion, commanding a 2011 P/E ratio of 23.3.
In Brazil, cement producer Cimentos Liz was finally offered to investors at R$7 a share from an original range of R$13 to R$16 before being pulled in early April. The deal was led by BTG, Itaú and JPMorgan. Meanwhile entertainment provider T4F priced at R$16, just below the middle of the range of R$14.50
