Tempo, Shareholders Raise 453 Million Reais in IPO

(Corrects company description in the first paragraph of an article originally published on Dec. 18.)

Tempo Participacoes SA (TEMP3), the Brazilian health-care network administrator and claims processor, is raising 453 million reais ($249 million) in an initial public offering, less than the company had forecast.

Tempo priced 56.25 million voting shares at 7 reais each, according to the nation's stock regulator. That's below the 8-to-10.50 reais range the Barueri, Brazil-based company predicted in its preliminary prospectus. Shareholders, including funds controlled by private equity firm GP Investments Ltd. (GPIV11), may offer 8.44 million more shares if there is demand.

Tempo, which also provides roadside assistance, is selling shares as the Bovespa benchmark index heads for what may be its biggest monthly decline in more than a year. The index has lost 5 percent so far this month, the worst performance since a 9.5 percent drop in May last year. Investors are concerned higher inflation will prevent the central bank reducing interest rates.

``The company offers an interesting investment case but the offering was affected by a negative environment for stocks,'' said Eduardo Rocha, who helps manage about 1.2 billion reais at Modal Asset Management in Rio de Janeiro.

Brazilian economists surveyed weekly by the central bank raised their 2007 and 2008 inflation forecasts in a survey released yesterday.

The company will have about 36 percent of its stock traded in the market if all the shares are sold. Today's pricing values Tempo at 1.25 billion reais. About 394 million reais of the proceeds go to the company and will be used for acquisitions and expansion, the company said in the prospectus. The rest of the money raised goes to the selling shareholders.

Health-Care Offerings

Tempo is the third health-related company to sell shares on the Sao Paulo stock exchange this year as prospects for economic growth fuel optimism that Brazilians will have more money to spend. Amil Participacoes SA, which sold shares in October, gained 14 percent, compared with Bovespa's 6.9 percent rise.

``Growth in this sector is highly pegged to the improvement in purchasing power,'' said Renato Pascon, who helps manage about 4.4 billion reais at Banco Alfa de Investimento SA, in Sao Paulo. ``As people's incomes increase, automatically you will have a higher demand for health plans.''

The government said Dec. 12 that Brazil's economy, Latin America's largest, expanded 5.7 percent in the third quarter, the fastest annual expansion since June 2004. Meanwhile, the unemployment rate fell to a 10-month low in October, increasing the number of people with a fixed monthly salary.

Banco UBS Pactual SA and Uniao de Bancos Brasileiros SA managed the sale. The shares will start trading Dec. 19 on the Sao Paulo stock exchange.

To contact the reporters on this story: Telma Marotto in Sao Paulo at Tmarotto1@bloomberg.net; Heloiza Canassa in Sao Paulo at hcanassa@bloomberg.net

To contact the editor responsible for this story: Rick Green at rgreen18@bloomberg.net

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