(Corrects to show retailer priced a share offer below the
suggested range, not an initial public offering, in headline and
By Guillermo Parra-Bernal and Marcela Ayres
SAO PAULO Dec 12 Via Varejo SA, Brazil's
largest home appliance retailer, priced a share offering below
the suggested range on Thursday, a sign that investors remain
skittish over the outlook for Latin America's largest equity
Units of São Paulo-based Via Varejo priced at 23
reais each, below the 25.60 reais to 33.60 reais pricing range,
according to information on the website of securities industry
Two sources told Reuters earlier in the day that even as
demand for the stock was solid, pricing might come at the low
end of the range or even below it.
Controlling shareholder GPA SA and the Klein
family raised a total of 2.845 billion reais ($1.22 billion),
Brazil's second biggest stock sale this year after BB Seguridade
Participações SA's 11.48 billion reais IPO in April.
GPA and the Kleins did sell the combined 106.7 million units
they had put on the block.
The Via Varejo offering took off even as local investors,
who placed orders for 60 percent of the deal, sought a large
price discount to protect themselves from a recent rout in
domestic equities and the impact of further divestments by the
Kleins expected next year, one of the sources said after the
deal was priced.
According to the source, investors placed bids for the units
2.5 times the amount offered at a price of 23 reais each. At
higher prices, though, demand was to come in substantially
lower, the source added, without elaborating.
"You can't rate this deal only from the point of view of the
price range; it was successful given the challenging conditions
out there," said the source, who declined to be identified
because some aspects of the deal are still being finalized.
Brazil's once-hyped market for IPOs and follow-on offerings
has struggled over the past couple of years, given the risk of
over-priced deals, flagging economic growth and the impact of
heavy state interference in some sectors of the economy.
Last week, CVC Brasil Operadora e Agencia de Viagens SA
priced shares in its IPO below expectations, partly
on worries of how Brazil's slowing growth and cooling job market
could dent demand for air tickets, hotels and travel.
For Via Varejo, investors sought to increase their exposure
to the company's lead in the local appliance market, an ongoing
turnaround in its operations and a potential recovery in
household spending and credit disbursements. Via Varejo has 26
percent of Brazil's consumer electronics market, according to
The investment banking unit of Credit Suisse Group AG
managed the deal, along with Bradesco BBI
and Bank of America Merrill Lynch. Advisers also
included Goldman Sachs Group Inc, Itaú BBA,
JPMorgan Chase & Co, Banco Santander SA, and
Via Varejo was formed as an autonomous unit of GPA in 2010,
months after the retail giant acquired Casas Bahia SA and Globex
Utilidades SA, at the time Brazil's biggest home appliance
The Klein family, led by patriarch Samuel Klein, a Holocaust
survivor who founded Brazil's top appliances retailer Casas
Bahia in 1952, held a 47 percent stake in Via Varejo before the
deal. The Klein's plan to carry out the divestiture through the
sale of units was approved by Via Varejo's board in June.
Each unit, which includes one common share and
two preferred shares, will start trading on the São
Paulo Stock Exchange under the symbol "VVAR11" from Dec. 16.
($1 = 2.34 Brazilian reais)
(Reporting by Guillermo Parra-Bernal and Marcela Ayres; Editing
by Gary Hill and Leslie Adler)