Tam Rises After Extending Offer to Swap Shares in Lan Merger

Tam SA (TAMM4), Brazil’s biggest airline, rose the most in eight months after extending an offer to swap shares as part of its combination with Chile’s Lan Airlines SA. (LAN)

Shares advanced 6.8 percent to 44.35 reais at the close in Sao Paulo, the steepest one-day gain since Oct. 5. It was the best performance on the benchmark Bovespa index, which gained 1.9 percent.

An offer to receive 0.9 Lan share for each Tam share closed yesterday, with 94.4 percent of shares tendered, the two airlines said in regulatory filings today. Because acceptances fell short of a 95 percent threshold that allows Tam to buy back leftover shares compulsorily, the offer was extended 10 days and results will be registered June 22 at 10 a.m. Sao Paulo time, according to the filings.

“The market expects the percentage to meet requirements in this new deadline, and share prices advancing today show that the portion of investors potentially interested in accepting the offer is growing,” Rodolfo Amstalden, an analyst at Empiricus Research, said by phone from Sao Paulo.

Tam will be delisted if owners of at least two-thirds of the stock from minority holders accept the offer. Tam holders will receive depositary shares in Latam Airlines Group SA, the company formed by the merger, which would be the world’s most valuable carrier with a leading position in Brazil.

To contact the reporter on this story: Denyse Godoy in Sao Paulo at dgodoy2@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net