Gerdau, Shareholders Raising $3.5 Billion in Top Brazil Offer in 7 Months

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  • Posted on April 12, 2011


    Gerdau SA (GGBR4), Latin America’s largest steelmaker, and shareholders are raising as much as 5.5 billion reais ($3.5 billion) in the region’s biggest stock sale in almost seven months.

    Gerdau sold 68 million new common shares and 134.8 million new preferred shares for 15.60 reais and 19.25 reais each, respectively, while existing investors sold an additional 69 million preferred shares, according to regulatory filings today. The Porto Alegre, Brazil-based company may issue an additional 10.2 million common shares and 20.4 million preferred shares in a supplementary offer.

    The share sale is Latin America’s biggest since Brazil’s state-run oil producer Petroleo Brasileiro SA raised $70 billion in the world’s biggest offering in September. Before today, 10 companies had sold shares in public offerings on the Sao Paulo exchange this year, raising a combined $2.78 billion, down 50 percent from this time last year.

    The pricing was “very reasonable” and didn’t come with much of a discount below recent trading prices, Leonardo Brito, an equity analyst at Teorica Investimentos, said by telephone from Rio de Janeiro. “At these levels, the offer price is quite attractive.”

    Gerdau’s preferred shares fell 3.6 percent to 19.37 reais in Sao Paulo, bringing its total loss in the past 12 months to 37 percent. The common stock dropped 3.6 percent to 15.60 reais.

    Banco BTG Pactual SA, Banco Bradesco BBI SA and Banco Itau BBA SA managed the sale.

    To contact the reporter on this story: Juan Pablo Spinetto in Rio de Janeiro at jspinetto@bloomberg.net

    To contact the editor responsible for this story: Jessica Brice in Sao Paulo at jbrice1@bloomberg.net

    Bloomberg/AC