Colombia's Grupo Suramericana expects to add as many as 150,000 new stockholders through its US$2.1bn preferred share issue that will partly finance the acquisition of Dutch group ING's (NYSE: ING) Latin American pension, life insurance and investment management operations, the holding's finance VP, Andrés Bernal, told BNamericas.
"We are very optimistic about the issue. We already conducted a pre-road show in Colombia, Chile, Brazil, the UK, Germany, the Netherlands and the US. In the actual road show, which will begin next Monday [Nov 7], we will be in those same countries as well as Peru, France and Spain," he said.
Last week, the group set a price of 32,500 pesos a share for the 120mn-share issue, equal to a 3.1% premium over the average share price in the past month. The subscription period will run until November 22.
In a report, local brokerage Interbolsa placed a buy recommendation on the stock, with a target price of 45,580 pesos - a potential 40% upside - plus a preferred dividend yield of 3% annually.
Suramericana's 2.68bn-euro (US$3.9bn) purchase was announced in July and will be funded through a combination of cash, debt, shares and the incorporation of international funds as minority shareholders.
IFC - the private sector investment arm of the World Bank - is reportedly pondering its entry into the deal.
The ING purchase was the largest ever by a Colombian firm and includes 14 companies in Colombia, Mexico, Chile, Peru and Uruguay, with combined assets of US$70bn as of end-2010 and net income of more than US$275mn.
The transaction is scheduled to close mid-December.
BNAmericas.
