May 27, 2014

JBS seeks approval for sales of processed food unit's shares

JBS SA is seeking regulatory approval of the sales of shares concerning the company's poultry and processed food unit in what would be Brazil's first initial public offering in 2014.

Voting shares of JBS Foods SA will be listed in Brazil's Novo Mercado subject to regulatory approval and market conditions, the Sao Paulo-based company said in a filing.

The IPO would help release value by separating the unit from the parent company.

JBS Foods, the second-largest producer and exporter of poultry and pork in Brazil, was formed after JBS agreed to acquire Seara food processing assets from Marfrig Global Foods SA (MRFG3) for US$2.6 billion in June 2013.

JBS has also hired units of JPMorgan Chase & Co. and Banco Bradesco SA for a US$1.3 billion IPO of the unit, two people with direct knowledge of the matter revealed.

The company also hired Banco Itau BBA SA, Banco Santander SA, Grupo BTG Pactual and Banco do Brasil SA to underwrite the share offering of JBS Foods, according to the sources.

The timing of the sale will depend on market conditions, they said. JBS, Banco do Brasil, Santander, JPMorgan, Itau BBA, Bradesco BBI SA and BTG declined to comment at the time.

JBS fell 1.5% to US$3.45 in Sao Paulo this month, extending a loss this year to 13% compared with the Brazilian benchmark's gain of 1.7%.