Carrefour Brasil IPO seen pricing at low end of range, say sources: Reuters

Grupo Carrefour Brasil SA’s initial public offering could price at the bottom of a suggested price range later on Tuesday, reflecting concern over too stretched a valuation for Brazil’s biggest supermarket chain, three people familiar with the matter said.

Late on Monday night, investors had placed less than twice the size of Carrefour Brasil shares on offer at the IPO, based on a price of 15 reais a piece, said the people, who requested anonymity to discuss the deal freely. The company and shareholders expected to raise up to 5.6 billion reais if the IPO were price at the ceiling of the range, or 19 reais per share.

The separate debut offering of Grupo Biotoscana SA, a Colombia-based pharmaceutical firm, on Wednesday had investors willing to place three times the amount of shares on offer, at the mid-point of a 24.5 real-to-28.5 real price range, two of the people added.

Investors stung by a string of deals in recent years that failed to deliver promised returns are wary of IPOs in Brazil. Less than one-third of the 115 IPOs priced since the start of 2007 yielded returns above Brazil’s interbank lending rate, Thomson Reuters data showed, with the remainder losing part or all of the amount initially invested.
Carrefour did not respond to requests for comments.