CCX’s 45% Surge Before Buyback Prompts Queries in Brazil

CCX Carvao da Colombia SA’s 45 percent jump yesterday before billionaire Eike Batista’s share buyback announcement has prompted queries from the local stock exchange.

Batista, who last year lost the title of Brazil’s richest person, said after the market closed yesterday he plans to take coal company CCX private. Yesterday, the stock closed up 45 percent at 3.13 reais in Sao Paulo. Today, the shares gained 22 percent to close at 3.83 reais and are up 87 percent this year.

CCX isn’t aware of any other fact that would justify recent swings in the share price, the company based in Rio de Janeiro said today in a statement. CCX said it was responding to information requests from Brazil’s Bovespa stock exchange and forwarded the information to the country’s securities and exchange commission, known as CVM. The Bovespa exchange didn’t reply to e-mails and phone calls seeking comment.

“The CVM follows movements in publicly traded companies and takes appropriate measures when necessary, and doesn’t comment on specific cases,” the exchange said in an e-mailed reply to questions.

Batista offered as much as 4.31 reais per share payable in stock of other public companies controlled by his EBX Group Co. holding, according to a regulatory filing yesterday. The offer is twice CCX’s Jan. 18 closing price and values the coal producer at about 733.1 million reais ($358 million).

Deteriorating Market

“CCX will be required to undergo some changes in its strategic plan, due to the deterioration of coal market conditions,” Batista said in the statement. EBX’s press office in Rio didn’t offer additional comments on yesterday’s price rise.

Today was the fourth consecutive day the shares gained. The stock had slid 75 percent from its May listing through Jan. 18.

CCX, the smallest of Batista’s publicly traded companies by market value, was listed in Sao Paulo on May 25 after being spun off from the billionaire’s power-generating unit MPX Energia SA. (MPXE3)

Batista’s EBX controls 62.3 percent of CCX. The remaining 37.7 percent trades on Brazil’s stock exchange.

Batista in September suspended a plan to pay as much as 618.7 million reais to delist his port-developer unit LLX Logistica SA (LLXL3) after an evaluation indicated he would have to spend more than twice what he initially expected.

To contact the reporters on this story: Juan Pablo Spinetto in Rio de Janeiro at jspinetto@bloomberg.net; Adriana Chiarini in Rio de Janeiro at achiarini4@bloomberg.net

To contact the editor responsible for this story: James Attwood at jattwood3@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.