Gafisa Falls on Concern Company Lacks Cash to Complete Purchase
Gafisa SA (GFSA3), the Brazilian homebuilder that has posted worse-than-expected earnings for six straight quarters, led declines in Sao Paulo on a report that it is having trouble raising the cash to complete the acquisition of its Alphaville unit.
Shares dropped 5.4 percent to 2.27 reais at the close in Sao Paulo, the worst performance on the benchmark Bovespa index, which was little changed. The BM&FBovespa Real Estate Index declined 0.8 percent.
Gafisa bought 60 percent of Alphaville, which focuses on the high-income market, in 2006 with an option to acquire 20 percent more in 2010 and the remaining 20 percent this year. The company said in a June 1 filing it had begun the process to complete the transaction. Valor Economico reported today that Gafisa is facing difficulty raising the needed 368.7 million reais ($179.3 million) and is seeking alternatives, including a spinoff. The newspaper didn’t say where it got the information.
“Alphaville is one of the only units of Gafisa showing good results lately,” Ana Rayes, an analyst at equity research firm Lopes Filho & Associados, said by phone from Rio de Janeiro. “It would have a negative impact for Gafisa not to complete the acquisition.”
The company also is considering finding a strategic partner for the business, Valor reported.
Gafisa’s press office declined to comment on the report when contacted by Bloomberg News.
The homebuilder’s shares lost 45 percent this year, compared with the benchmark’s 5.9 percent decline.
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