Brazil Via Varejo offer seen pricing at low end of range -sources

SAO PAULO Thu Dec 12, 2013 1:03pm EST

SAO PAULO Dec 12 (Reuters) - Demand for a secondary offering of units of Via Varejo SA, Brazil's largest home appliance retailer, is solid, but orders are pricing the offering at the low end of the suggested price range or even below, two sources with knowledge of the deal said on Thursday.

The Klein family, a major shareholder of Via Varejo, and controlling shareholder GPA SA, also Brazil's largest diversified retailer, plan to offer 107.6 million units of Via Varejo in a transaction expected to be concluded later on Thursday. Each unit includes one common share and two preferred shares.

The units will be traded on the São Paulo Stock Exchange under the symbol "VVAR11" starting on Dec. 16.

According to the two sources, who declined to be identified because the deal is still in the works, demand is strong but orders are close to the bottom of the 25.60 reais to 33.60 reais pricing range. Orders from U.S. investors before the deal book closes on Thursday afternoon will be crucial to determine the pricing level for the transaction, one of the sources said.

The shareholders of Via Varejo hope to raise as much as 4.9 billion reais ($2.1 billion) through a secondary sale of the units. GPA will offer 26.9 million units, while the Kleins are seeking to sell 80.7 million units.

The total number of units could be increased by 16.1 million units in a so-called supplemental offering, plus another 21.5 million units in an additional offering.

Via Varejo declined to comment.

The investment banking unit of Credit Suisse Group is leading the deal, along with Bradesco BBI and Bank of America Merrill Lynch. Bookrunners include Goldman Sachs Group Inc, Itaú BBA, JPMorgan Chase & Co , Banco Santander SA, and UBS AG .

A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

Find your dream retirement town

Florida? Hawaii? Reuters has teamed up with Zillow to give you the power to customize a list of your best places to retire.  Video | Full Article