CVC Declines After Pricing Below Range in IPO: Sao Paulo Mover

CVC Brasil Operadora e Agencia de Viagens SA (CVCB3), the Brazilian travel agency controlled by Carlyle Group LP, fell on its first trading day after shares were priced below the intended range in an initial public offering.

The stock dropped 4.4 percent to 15.30 reais at 12:52 p.m. in Sao Paulo. The benchmark Ibovespa gauge added 0.3 percent. The shares were priced at 16 reais, below the range of 18 reais to 22 reais estimated in a prospectus.

The company and its investors including Carlyle raised as much as 540 million reais ($232.2 million) by selling 33.75 million existing shares, according to a regulatory filing. They had been seeking to sell as many as 45.6 million shares for as much as 1 billion reais. CVC was the fifth of 10 Brazilian IPOs priced at the bottom or below the target range this year as the Ibovespa sank the most among the world’s major equity gauge.

“Investors are very selective in buying stocks in Brazil now, especially of companies that depend on domestic demand, because the country’s growth next year doesn’t seem very exciting,” Marcel Kussaba, the head of equity research at Quantitas Asset Management in Porto Alegre, Brazil, said in a telephone interview.

Kussaba forecasts Brazil’s gross domestic product will expand 1.5 percent in 2014, compared with the 2.5 percent median forecast of economists surveyed by Bloomberg. The national statistics agency reported Dec. 3 that Latin America’s largest economy contracted 0.5 percent in the third quarter, more than the median estimate of economists surveyed by Bloomberg, which called for a 0.3 percent decline.

The Ibovespa has declined 26 percent this year in dollar terms, the steepest drop among the world’s 20 biggest equity benchmarks, as growth in Latin America’s largest economy faltered.

CVC, which says it is Latin America’s biggest travel agency, booked sales of 4 billion reais in 2012 and 3.3 billion reais this year through September, according to a prospectus.

To contact the reporter on this story: Denyse Godoy in Sao Paulo at

To contact the editor responsible for this story: Brendan Walsh at

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