Brazil Redecard Soars as Report Questions Itau Bid Price
06/18/2012| 01:32pm US/Eastern
--Redecard shares up more than 4%
--Investment bank says Redecard more valuble than offer price
--Itau wants to buy the 49.9% of Redecard that it doesn't already own
(Adds adjusted company shares price, analysts comments, in the first, second and seventh paragraphs.)
SAO PAULO--Shares of Brazilian credit-card company Redecard SA (RDCD3.BR) were soaring Monday after an investment bank deemed the firm could be more valuable than the price offered by Itau Unibanco Holding SA (ITUB, ITUB4.BR).
Redecard shares were up more than 4% at 33.1 Brazilian reais ($16) in Monday's midsession, one of the biggest gainers on the main local stock market index, the Ibovespa, which was up 0.14%.
Late Friday, Redecard said that the independent report put its share price at between BRL34.66 and BRL38.12, which puts Itau's bid of BRL35 at the low end of the range. The report was prepared by Credit Suisse Group AG (CS) for Lazard Asset Management LLC, which owns Redecard shares.
Itau wants to buy the 49.9% of Redecard that it doesn't already own, saying the current ownership structure isn't efficient.
Itau has previously said it won't raise its BRL35 per share offer and will abandon the bid unless shareholders tender two-thirds of the outstanding stock. Indeed, Itau's chief executive, Roberto Setubal, has said the bank may sell part or all of its 51.1% stake in Redecard if the offer fails.
The bank plans to hold the public-tender offer to acquire Redecard's shares in July or August.
"We didn't expect any of the economic appraisals to be materially different from BRL35.00. Despite offering a superior range, the new economic value determined by the independent appraiser still leaves the price offered by Itau within what they considered as a fair assessment. Hence, based on this new assessment, we believe Itau will not change the terms already filed with CVM (Brazil's Securities and Exchange Commission)," Barclays said in a research report for its clients.
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