April 28, 2010

JBS raises US$1.03 billion in share sales

Brazil's JBS SA, the world's biggest beef producer, is raising BRL1.84 billion (US$1.03 billion) through the sale of new voting shares three months after delaying the listing of its US-based unit.

JBS is selling 230 million shares, including a possible supplementary offering, for BRL8 (US$4.51) each, according to a regulatory filing. That is 1.7% below the BRL8.14 close in Sao Paulo. JBS said eralier this month it would sell as many as 270 million voting shares.

The company is set to join 12 other companies that have priced their share sales in Brazil so far this year, compared with two for the same period a year earlier, according to reports. State-controlled oil company Petroleo Brasileiro SA is also planning to raise US$25 billion by selling shares.

Earlier, JBS postponed the US$2 billion initial public offering (IPO) of its JBS USA Holdings Inc. unit in January, saying market conditions worsened. JBS's shares have fallen 13% this year, compared with a 3% loss for Brazil's benchmark Bovespa index.

Five of the seven IPOs in Brazil this year have priced shares below the estimated range, including Julio Simoes Logistica SA, which sold its stock for BRL8 each after cutting the price estimate to a range of BRL8.50-9.50 from as much as BRL13.75.

JBS's share sale will help raise funds to expand its global distribution after several acquisitions, according to the prospectus. The meatpacker controls more than 10% of global beef processing after about 30 acquisitions in the past 15 years, including Smithfield Foods Inc.'s beef business in early 2008.

The company, which resumed purchases late last year after the global credit crunch reduced the value of assets, has acquired Pilgrim's Pride Corp., Brazil's Bertin SA and Australian lamb producer Tatiara Meat Co.