Brazilian real estate developer BR Properties and its shareholders said on Thursday the company's initial public offering raised 1.07 billion reais ($597 million), but fell short of expectations. Shares in the offering were priced at 13 reais, below the expected price range of 14 to 18 reais.
The company and shareholders placed 62.89 million shares in a primary offer and 19.76 million in a secondary. BR Properties shares will start trading on March 8 on the Sao Paulo stock exchange.
BR Properties shareholders include brothers Joao Roberto and Jose Roberto Marinho, who control Brazil's largest media conglomerate Globo. Another 18 private equity and investment companies, including Singapore state investor Temasek [TEM.UL] and several Lehman Brothers real estate funds, are also selling the company's shares. BR Properties said it plans to use 85 percent of the proceeds from the primary offering to buy commercial real estate, to modernise existing buildings or for acquisitions. The remaining 15 percent will be used to develop its commercial properties.
Four companies including real estate developer PDG Realty and shopping mall operator Aliansce have launched either initial public offerings or secondary share sales in Brazil so far in 2010, raising a combined 3.3 billion reais.
Two offerings were priced below the expected range and three deals were either cancelled or delayed amid a surge in global risk aversion at the start of the year. But analysts and investment bankers expect 2010 to be a banner year for equity sales in Brazil as investors seek to benefit from an expected gross domestic product growth rate of almost 6 percent.
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