January 31, 2023
bk brasil

BK Brasil: Board of Directors rejects swap offer

Burger King Brasil’s Board of Directors has published its opinion on Mubadala IPO To buy 45% of the company’s capital.

a board Take a stand against OPA – quoting the bid price and the effect that selling control of the stock’s liquidity can have.

Abu Dhabi’s sovereign wealth fund offered R$7.55 per share, a 21% premium over closing the day before the offering.

The board said the price was well below the fair value calculated by the company’s financial advisor – BTG Pactual – who used a variety of methodologies to calculate fair valueincluding discounted cash flows, market multiples and similar transactions.

BTG has reached a range of R$9.96 to R$13.47 for a fair share price, with a midpoint of R$11.72 – a 55% premium over the value offered by Mubadala.

The paper is trading today at R$8.40, after rising more than 35% following the supply news.

The board also said that it held meetings with investors who represent about 60% of the company’s capital.

According to the board, they have expressed concern about the price. Impact on liquidity. And also with the company that has a “financial” controller and without previous experience in the sector.

“The controlling shareholder may be interested in making acquisitions, disposing of assets or partnerships, seeking financing, or making other decisions that may conflict with the interests of other shareholders and that may not lead to improvements in their operating results, causing a material adverse effect,” the opinion said. .

The document also notes that if the bid is successful, there will be a “substantial” drop in the stock’s liquidity.

Now, Mubadala will have to decide whether to withdraw the offer, raise the price, or risk going to auction without being sure that it can accept it.

The auction is scheduled for September 15th. For the OPA to materialize, Mubadala needs to find sellers for 45% of the capital – which is unlikely in the current scenario.

The largest shareholders in BK Brasil are Atmos Capital and Restaurant Brands International, both of which are about 10%; Morgan Stanley 9.35%; And rises Partners by 6.4%.

Pedro Arbex