brMalls will discuss the new improved business combination proposal presented by rival Aliansce Sonae, which values the new shopping center company to be formed with the merger at around R$12 billion.
After having two previous offers rejected, Aliansce earlier made public a third proposed combination with brMalls, which rated the offer as having a “more favorable exchange ratio for brMalls shareholders”.
If successful, the proposal should lead to the creation of one of the largest shopping center companies in the country, with around 70 projects spread across Brazil.
The negotiation also comes at a time when shopping companies are trying to reinvent themselves with solutions aimed at e-commerce and offering services while facing strong competition from digital marketplaces that have leveraged growth with social isolation measures.
At 1:25 pm, brMalls shares had soared 7.3%, while Aliansce shares had gained 0.8%. At the same time, the Ibovespa showed a drop of around 1%.
Aliansce’s new offer involves a cash payment of BRL 1.25 billion and control of the combined new company by brMalls shareholders, who will have a 55.2% stake, the companies said. In the previous proposal, the share of brMalls shareholders in the new company would be 51%.
In addition to the cash portion, Aliansce will deliver to brMalls shareholders 326.34 million shares, equivalent to R$ 6.6 billion according to the closing price of the day before.
The new offer provides that brMalls shareholders will receive 0.3940 Aliansce share for each brMalls share they hold.
brMalls stated that the new offer represents an increase of approximately 18% compared to the exchange ratio of Aliansce’s first proposal, sent in January this year.
Citigroup analysts André Mazini and Renata Cabral said in a note to clients that the new offering represents a 13% premium over the closing price of brMalls shares on Monday (18), up from the 3.3% premium represented by the previous offer.
“We are now assigning a greater chance that the matter will pass,” the analysts said. brMalls has a market value of R$7.2 billion, while Aliansce Sonae is valued at R$5.6 billion.
Aliansce and brMalls have some common shareholders, including the Canada Pension Plan Investment Board (CPPIB). The Canadian pension fund holds 28.5% of Aliansce and 10.8% of brMalls.
Source: CNN Brasil
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