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Equity deal of the quarter century: Bovespa Holding

Sep 1, 2013

BRL6.63bn IPO, 2007

The possibilities for equity issuance by Latin American companies have expanded since Bovespa Holding’s 2007 IPO. But the deal’s intricate structuring and its standing as one of the most substantial IPOs to date from any exchange, put it top of its class in Latin America. It required particular skill from the stock exchange’s top executives and bankers hired to transform a complex partnership of dozens of broker-dealers into a publicly traded entity with a single share class.

The 6.63 billion real ($3.68 billion) transaction was multiple times oversubscribed and shot through a 15.50-18.50 real per share indications to price at the top of a revised 20.00-23.00 real range. Still, shares leapt more than 50% the following day. Foreigners bought nearly 80% of the sale which was managed by Credit Suisse and Goldman Sachs.

The deal was followed a month later by the 5.98 billion real BM&F listing, and the two would agree to merge the following May.

The Bovespa IPO was the brightest from a slew of such deals in 2006 and 2007. There have been several standout deals since, some considerably larger. These include a Petrobras follow-on of which around $20 billion was sold publically, and BTG Pactual, BB Seguridade and Santander Brazil and Mexico IPOs. But none have matched the smooth execution of Bovespa’s, nor the complexity needed to list the Brazilian exchange that would soon merge with another newly public company, BM&F. LF

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