Batistas OGX Falls Most in 2 Months as Investors Sell for Petrobras Offer

OGX Petroleo & Gas Participacoes SA fell the most in more than two months in Sao Paulo trading as investors sold shares ahead of an equity offering by rival Petroleo Brasileiro SA.

OGX, the oil company controlled by Brazilian billionaire Eike Batista, dropped the most since June 29, losing 5.7 percent to 19.30 reais as of the 4 p.m. New York time close.

Petrobras, Brazil’s state oil company, plans to issue as much as 55 billion reais ($32 billion) of new stock to minority shareholders. The Ontario Teachers’ Pension Plan Board said in a filing today that it cut its stake in OGX to 4.77 percent on Sept. 1, after previously holding as much as 10.67 percent, according to data compiled by Bloomberg. Investors may be selling OGX to free up cash for the Petrobras offering, said Fabio Cardoso, a partner at equity-advisory firm Adinvest Consultoria.

“A lot of investors are very underweight in Petrobras,” said Young Kim, chief investment officer of Mirae Asset Global Investments Brasil, which oversees $1.1 billion in Sao Paulo, including Petrobras stock, and plans to buy shares in the offering. “People are overweight in OGX or Vale, and they’re going to buy. It’s a huge, huge capital raising.”

Petrobras gained 4.4 percent to 28.80 reais after losing 25 percent this year through yesterday. The company is raising money to fund a $224 billion plan to develop offshore fields and expand refineries. OGX, which doesn’t yet produce any oil, surged 20 percent in the same period.

“OGX is in the same industry and people are opening a little more space for Petrobras,” Cardoso said by phone from Rio de Janeiro.

Vale fell 0.3 percent to 42.72 reais after advancing 1.5 percent this year before today.

To contact the reporter on this story: Alexander Cuadros in Sao Paulo at acuadros@bloomberg.net

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