Pão de Açúcar doubles size in six months
Valor Econômico
The conversations between Abílio Diniz, controlling stockholder of Grupo Pão de Açúcar, and the investment analysts are far from being the most cordial ones. Yet, if there was a businessman who took advantage from being a publicly traded corporation in 2009 it is certainly him. In six months, spending only R$ 500 million (US$ 290.7 million), Pão de Açúcar doubled its size with the acquisitions of Ponto Frio and Casas Bahia. From a company with earnings little below R$ 20 billion (US$ 11.6 billion), it became a business with annual gross earnings of R$ 40 billion (US$ 23.3 billion).
The secret of the cash economy of Pão de Açúcar is the use of an increasingly common currency in the Brazilian transactions: Shares. Both the acquisitions were paid, either partly or fully, with papers of listed companies. In the case of Ponto Frio, only 45% was paid in cash, and the rest, in shares. As for the operation in which Casas Bahia, at the end of the day, ends up as an indirect subsidiary company of the Pão de Açúcar Group, was fully paid with shares of the Ponto Frio company, acquired in June.
Both the businesses were designed by Pércio de Souza, partner of the Estáter financial advisor company.
For now, the Klein family will not receive anything in cash for the union - except for the rent of the properties where the stores are located. But they will receive something that becomes more valuable every day with the development of the capital market: the perspective of liquidity. That is, of turning assets into cash. Casas Bahia is a limited liability company, without shares listed in the stock market.
The Klein family will have 49% of Ponto Frio. For now, these papers will not have liquidity. But the fact the company is a publicly-listed company will facilitate the life of the founders of Casas Bahia when it comes the time of turning it into cash. It will only be necessary to make a public offer for the sale of the papers. And only then, and if the Kleins sell their shares in the stock market, will it be possible to know how much they took home, after all.
Ponto Frio ended Friday evaluated at R$ 2.3 billion (US$ 1.34 billion) at the Bovespa, before taking over Casas Bahia. Since the assets of the company - plus R$ 120 million (US$ 69.8 million) in property that will be transferred by Pão de Açúcar from Extra Eletro - will be equivalent to 51% of the business, it is possible to conclude that the new company might have a value in the stock market of nearly R$ 4.7 billion (US$ 2.73 billion), after the absorption of the property that will be deposited by the Kleins.
Ponto Frio, referred to as Globex at the Bovespa, is little negotiated. Such liquidity should be even smaller after the public offer for the purchase of the minority shareholders - to extend the premium of control for the sale to Pão de Açúcar. Currently, only 4.5% of the share capital is traded in the stock market, 3.5% of which on the hands of employees. However, the idea is that regardless of that the registration of publicly traded corporation of Ponto Frio should be maintained, so as to facilitate the exit of the Kleins when they like. But no offer is expected before one year. The shares of Ponto Frio held by the Kleins will be blocked for sale for some time. They will be gradually released for sale.