Tagus Reluctance on Brisa Prompts Funds to Sell Remaining Shares

Portuguese equity funds sold shares in Brisa-Auto Estradas de Portugal SA after losing hope that Tagus Holdings Sarl, the highway operator’s biggest shareholder, would offer more than the company’s current share price to remove it from the stock market.

The Alves Ribeiro (ARMEMPO)-Medias Empresas Portugal fund was the last of seven domestic funds investing exclusively in Portuguese stocks to dispose of its stake, selling its 30,000 shares in January, according to the website of Portugal’s securities regulator.

“Everything indicates that Tagus is not willing to pay more than the current share price to buy the remaining stake in Brisa,” Paulo Monteiro, who manages the Alves Ribeiro-Medias Empresas Portugal (ARMEMPO) fund, said in a phone interview today.

Tagus, a venture of Portuguese holding company Jose de Mello SGPS SA and Arcus Infrastructure Partners, secured 92 percent of Brisa’s voting rights after a 2.76-euro-a-share bid for the company last year, is working on an exit mechanism for the remaining shareholders, Brisa said in a regulatory filing on March 3 based on a statement it received from Tagus.

An independent auditor will be appointed to determine the price Tagus has to pay for the shares that belong to “at least” those Brisa shareholders who did not sell their holdings during the tender offer, it said.

The move, about a year after Tagus announced its bid for Brisa, is aimed at getting approval from Portuguese securities regulator CMVM for Tagus to remove the toll-road operator from the stock market, according to Tagus.

Brisa, based in the Lisbon suburb of Sao Domingos de Rana, has declined about 20 percent since Aug. 9, when it announced the results of the offer. The stock fell 1.8 percent to 2.18 euros at 2:30 p.m. in Lisbon.

To contact the reporter on this story: Henrique Almeida in Lisbon at halmeida5@bloomberg.net

To contact the editor responsible for this story: Jerrold Colten at jcolten@bloomberg.net