* Shares at $21.46, 26 pct above IPO price
* Sold shares above price range, raised $1.25 bln
* Begins trading on NYSE under symbol "ARCO"
* BofA, JPMorgan, Morgan Stanley among underwriters
* Largest McDonald's franchisee
(Adds CEO comment and investor comments, updates shares)
By Alina Selyukh
NEW YORK, April 14 Shares of Arcos Dorados
Holdings Inc (ARCO.N), a large South American franchisee of
fast-food chain McDonald's Corp (MCD.N), rose 26 percent in
their stock market debut as investors clamored for exposure to
the famous brand in a region with booming consumer spending.
The shares were up $4.46 at $21.46 in Thursday afternoon
trading on the New York Stock Exchange after an upsized IPO
that priced above the proposed range and raised $1.25 billion.
Argentina-based Arcos Dorados, whose name means "golden
arches" in Spanish, is the largest McDonald's franchisee by
sales and number of restaurants, taking in about 5 percent of
all money spent at the hamburger chain around the world in
2010, according to a filing with U.S. regulators.
Arcos Dorados has been setting up to benefit from the
growing modernization in Latin America as more and more people
adopt fast-paced lifestyles that rely on the convenience of
"There's a lot of growth taking palce in Latin America and
... this company is building the path toward that," said Edward
Jones analyst Jack Russo. "It's a company that obviously has
great brand recognition."
Arcos Dorados garnered demand from predominantly U.S.-based
investors focusing on Latin American and global growth, a
source familiar with the deal previously told Reuters.
Based on its initial public offering on Wednesday, the
company has a market cap of more than $4.6 billion, according
to Francis Gaskins, an analyst at IPO Desktop.
Analysts have highlighted Arcos Dorados as a way to invest
in a blue-chip brand with exposure to the hot consumer sector
in an emerging market. Consumer-oriented companies in Latin
America have been benefiting from the region's growth of
middle-class spending and overall incomes.
Arcos Dorados became a franchisee in 2007 and now has some
1,700 McDonald's-brand restaurants in 19 countries in South
America and the Caribbean, predominantly in Brazil.
Together with the McDonald's brand, Arcos Dorados inherits
other investment appeals of the global fast food chain, such as
streamlined supplies of raw materials, said Peter Jankovskis,
co-chief investment officer at Oakbrook Investments who owns
Arcos Dorados Chief Executive Woods Staton, who has been
running various McDonald's operations in Latin America for more
than 20 years, told reporters on a webcast that the company has
enough negotiating power with its suppliers to avoid passing on
the higher costs of corn, grain and meat to customers "in one
The Colombian-born Staton brought the McDonald's brand to
Argentina in the 1980s, helped develop it in Latin America, and
bought out the regional operation in 2007.
The company and its shareholders sold 73.5 million shares
at $17 each in the IPO, after planning to sell 62.5 million
shares at $13 to $15 each.
The company said it agreed with McDonald's to use the bulk
of net proceeds from the IPO for capital expenditures,
including opening and remodeling restaurants.
Shares of McDonald's were up 0.1 percent at $76.97 in
afternoon NYSE trading.
Bank of America (BAC.N), JPMorgan (JPM.N), Morgan Stanley
(MS.N), Itau BBA and Citigroup (C.N) underwrote the IPO.
(Reporting by Alina Selyukh and Phil Wahba, editing by Matthew
Lewis and John Wallace)