(Updates with quotes, background)
MEXICO CITY, Jan 24 (Reuters) - Shares of Mexican corn miller Gruma (GRUMAB.MX) rose more than 10 percent on Monday following the company’s announcement that it would sell off the bulk of its 8.8 percent stake in financial group Banorte (GFNORTEO.MX).
Gruma said it would sell the Banorte stake last Friday after markets closed. [ID:nN2141660] The corn tortilla maker suffered heavy losses on derivatives contracts during the 2008 global financial crisis that substantially increased its debt load.
“This is positive news for Gruma because they will be able to use this to reduce their significant debt,” said Carlos Alonso, a trader at Interacciones.
Gruma said it plans to offer up to 156 million Banorte shares in a secondary offering, the company said in a stock market filing.
Based on Friday’s closing price, Deutsche Bank said in a research note the sale would be valued at $724 million, which represents about 38 days of trading volume.
“(The announcement) comes after months of speculation that Gruma would sell its shares, particularly as Gruma has had its own financial issues and can sell the shares near historical highs,” Deutsche Bank equity analyst Mario Pierry said.
Both Gruma and Banorte, Mexico’s third-largest bank by assets and the largest still in the hands of domestic shareholders, are controlled by businessman Roberto Gonzalez Barrera.
Banorte agreed in November to buy smaller rival IXE IXEGFO.MX for $1.3 billion in stock to consolidate its position in the Mexican market. [ID:nN17195092]
Banorte shares fell 2.48 percent in early trading. (Reporting by Robert Campbell and Michael O‘Boyle, editing by Dave Zimmerman)