March 25, 2009
Brazil's Sadia shares rise on renewed Perdigao merger talk
Shares in Brazilian meatpacker Sadia jumped in early trade Tuesday (March 24) amid reports that the company and local rival Perdigao continue to work at a deal for a merger.
Shares in Sadia were 6.2 percent higher at 3.09 Brazilian reals (US$1.37) on the Brazilian Stock Exchange, or Bovespa, while the benchmark Ibovespa index was 1.8 percent lower.
According to the local business daily O Estado de S. Paulo, the deal is still a possibility, but the main sticking point remains the price to be paid for the Sadia shares held by the Furlan and Fontana families that control the company. The families want BRL8, while the controllers of Perdigao are offering BRL6, said the report.
Perdigao is the larger company, although the deal is being characterized as a merger.
Last week, Perdigao released a statement saying that talks between the two parties had ceased.
But, according to the report, background discussions between investment banks and lawyers continue.
The Brazilian government is known to support the deal to ensure that Sadia remains Brazilian.
Sadia, the former market leader, got into trouble last year due to mismanaged dollar derivatives positions, which yielded losses of BRL745 million.