* General Atlantic pledges to buy one-fifth of Smiles IPO
* Share offering seen propping up Brazil's No. 2 airline
* Gol shares jump after buyout firm's Smiles IPO plan
(Adds General Atlantic accord details, mileage sales, share
performance in paragraphs 1-3, 6, 10)
SAO PAULO, April 8 Shares of Brazil's Gol Linhas
Aéreas Inteligentes SA posted their biggest intraday
gain in a month on Monday as buyout firm General Atlantic LLC
pledged to invest 400 million reais ($202 million) in the
initial public offering of its Smiles SA customer loyalty unit.
The plan by the U.S.-based buyout firm to participate in the
Smiles IPO is largely seen as a sign of confidence in the
transaction, which is scheduled to price on April 25. Smiles
anticipates raising up to 1.35 billion reais ($681 million) in
the IPO, according to a regulatory announcement on Monday.
Gol, which is down more than 9 percent this year, has been
pressured over concerns that the Smiles IPO might not bring in
as much as the company was hoping for. The stock rose on Friday
after Reuters reported that the government was considering
extending aid to the country's beleaguered airline industry.
"Today's rise in Gol shares likely has more to do with the
General Atlantic deal than anything else," said Richard Cole, an
analyst with XP Investimentos in Rio de Janeiro.
At noon (1500 GMT), Gol shares were up 3.8 percent at 11.58
Smiles will offer at least 30.6 million common shares at
between 20.70 reais and 25.80 reais each in a so-called primary
offering - of which General Atlantic offered to subscribe up to
one-fifth. Another 13.5 million shares could be offered as
supplementary and additional lots.
Under terms of the accord, General Atlantic agreed not to
sell or transfer for at least nine months the Smiles shares it
acquires in the IPO - a move that should reduce concerns of an
overhang in the aftermath of the transaction, traders said.
The Smiles IPO could help prop up Gol, which for the past
year has struggled with a surge in operating costs, rising debt
and an economic slowdown that temporarily weighed down demand
for air travel. In recent months, Gol's fortunes have improved
after the Brazilian currency gained ground against the dollar,
helping tame costs, and economic growth began to gather steam.
Brazil's first loyalty program, Smiles was created by
extinct carrier Viação Aérea Riograndense SA about two decades
ago. It competes with Multiplus SA in Brazil's frequent flyer
and coalition programs market.
Multiplus and Smiles sell points to financial
institutions through affinity programs, airlines and retailers,
receiving money upfront.
An expected inflow of cash proceeds from the IPO as well as
from recent commercial agreements have bolstered the Smiles case
among investors. On Monday, Smiles concluded anticipated mileage
sales worth 400 million reais to Banco Bradesco SA
, Banco do Brasil SA and Banco Santander
Brasil SA, with the proceeds to be settled on April
Gol and Smiles hired the investment-banking unit of Credit
Suisse Group to manage the transaction, with
co-managers including Banco do Brasil, Itaú Unibanco Holding SA
, Morgan Stanley & Co, Deutsche Bank AG
and Banco Santander SA.
($1 = 1.98 Brazilian reais)
(Reporting by Alberto Alerigi Jr. and Asher Levine; Writing by
Silvio Cascione and Asher Levine; Editing by Theodore d'Afflisio
and Maureen Bavdek)