SAO PAULO, March 17 The board of Brazilian
for-profit education company Estácio Participações SA
has removed Chief Executive Officer Pedro Thompson from a group
discussing merger terms with rival Kroton Educacional SA
on allegations that he is boycotting the deal, Valor
Econômico reported on Friday.
According to Valor, which cited unnamed people familiar with
the matter, the board opened a formal probe into an anonymous
tip suggesting that Thompson is working against Kroton's
takeover of Estácio. Former Estácio CEO Rogério Melzi quit last
year for opposing the 28-billion-real ($9 billion) deal.
The source of the anonymous tip sent Estácio's board an
exchange of emails in which Thompson suggested a lawyer accuse
Kroton of interfering in Estácio's affairs before antitrust
approval, Valor said. Last month, officials at antitrust
watchdog Cade said Kroton's takeover of Estácio could hamper
competition in Brazil's education market.
Media representatives of Kroton, Estácio and Demarest
Advogados, Estácio's legal advisor on the deal, did not
immediately respond to calls and messages seeking comment.
The report comes as Kroton tries to convince regulators and
consumer advocate groups that the deal would not be detrimental
to the industry or lead to excessive market concentration. The
combination would create the world's largest education company
by market value and number of students.
Thompson's strategy of focusing on student loyalty has paid
off, helping Estácio report higher-than-expected fourth-quarter
earnings on Thursday. Under Thompson, Estácio's selling, general
and administrative expenses have slumped; student enrollment has
climbed; and higher tuition fees have pushed revenue above
($1 = 3.1172 reais)
(Reporting by Guillermo Parra-Bernal and Gabriela Mello;
Editing by Lisa Von Ahn)