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By Guillermo Parra-Bernal and Tatiana Bautzer
SAO PAULO Dec 12 Potential investors in
Wednesday's initial public offering of Brazilian homebuilder
Construtora Tenda SA have largely signaled their interest if the
transaction prices at the lowest end of the suggested price tag,
two people familiar with the plan said.
According to the people, several large investors who met
Tenda's owner, Gafisa SA, and the banks underwriting the deal in
recent days said Tenda would be fairly priced at 12.50 reais a
share or less. Gafisa previously set a maximum price of 16.50
reais per share for the IPO of the low-cost homebuilder.
If investor demand fails to translate into firm orders, the
banks in the IPO could put Gafisa shareholders first in line for
the final allotments of Tenda stock, the first person said. The
people added that Gafisa was unwilling to lower the IPO's
suggested price tag.
São Paulo-based Gafisa, which has put 40 million shares of
Tenda up for sale in the offering, declined to comment.
The situation underscores how political turmoil is keeping
investors wary of new equity issues. Gafisa has said the Tenda
listing gives investors a chance to seize on a three-year
turnaround that has helped the builder narrow the gap with
rivals MRV Engenharia SA and Direcional Engenharia SA
Last week, Gafisa put off the pricing date of Tenda's IPO by
one day, saying talks with investors were expected to last
longer than expected. Many investors, mostly local investment
firms, have balked at Gafisa's targeted value for Tenda of at
least 1.2 billion reais ($359 million), the people added.
A successful Tenda IPO would be the first for a local
homebuilder since Direcional's November 2009 debut. Shares of
Tenda are expected to trade under the symbol "TEND3."
The deal could also be increased by so-called additional and
supplementary allotments of 6 million shares and 8 million Tenda
shares, respectively. The placement of those allotments usually
hinges on the strength of investor demand for the deal.
Gafisa and Tenda hired the investment banking units of Banco
Bradesco SA, Banco do Brasil SA, Itaú Unibanco Holding SA, Banco
Votorantim SA and Bank of America Corp to work on the deal. The
banks stand to receive 25 million reais in fees if shares of
Tenda price at 14.50 reais apiece.
The banks declined to comment.
($1 = 3.3469 reais)
(Editing by Meredith Mazzilli and Peter Cooney)