Lupatech Jumps on Speculation of Odebrecht Takeover: Rio Mover

Lupatech SA (LUPA3), a Brazilian oil- equipment and services provider, rose to the highest in almost three months on speculation it has become a takeover target.

Lupatech, based in Caxias do Sul, Brazil, jumped 14 percent to 5.92 reais at the close in Sao Paulo, the highest since Nov. 21. The stock is up 33 percent this year, more than the 16.7 percent gain in Brazil’s Bovespa index.

Odebrecht SA (ODBE4), a Brazilian construction and chemicals group that also makes oil platforms, is considering buying Lupatech, Estado de S. Paulo columnist Sonia Racy said on the newspaper’s website today, without saying where she got the information.

Brazilian development bank BNDES and pension fund Petros last year agreed to buy a combined 300 million reais ($175 million) of Lupatech stock as part of a 700 million-real offer. Lupatech, which has posted losses every quarter since the beginning of 2010, is shifting its focus to oil exploration after bets that a production boom would stoke demand for its ropes and valves failed to materialize.

“They don’t have liquidity and they are very leveraged,” Erick Hood, an analyst at SLW Corretora brokerage, said by telephone from Sao Paulo. “Nothing is stopping other companies from making an offer, I think that would be viable.”

Lupatech declined to comment in an e-mailed response. Odebrecht Oleo e Gas, the oil-equipment and services division of Odebrecht, doesn’t have any “concrete” plans to make acquisitions at this time, the company said in an e-mailed response to questions. The company is “constantly studying” growth opportunities, it said.

Odebrecht’s press office referred all questions on Lupatech to its oil-services division.

To contact the reporter on this story: Peter Millard in Rio de Janeiro at pmillard1@bloomberg.net

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net

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