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ALL Surges on Speculation Cosan Talks to Resume: Sao Paulo Mover

ALL - America Latina Logistica SA, Brazil’s largest railroad operator, rallied the most since August after newspaper Valor Economico said the company may restart merger talks with Cosan (CSAN3) SA Industria & Comercio.

ALL surged 8 percent to 6.75 reais at 12:12 p.m. in Sao Paulo. It was the best performer of the benchmark Ibovespa, which fell 0.9 percent. Cosan, a producer of sugar and ethanol, gained 2.2 percent to 37.71 reais.

Cosan Chairman Rubens Ometto and ALL shareholders may resume talks on a merger that could help resolve a dispute over sugar transportation contracts, Valor reported today, without saying how it got the information. Sao Paulo-based Cosan abandoned plans to pay 896.5 million reais ($374.5 million) for a 5.67 percent stake in ALL in August, saying negotiations “ended without the transaction coming to fruition.”

While Cosan’s Rumo Logistica SA unit said it delivered on a pledge to invest about 1 billion reais to increase rail capacity in the partnership to carry sugar to Brazil’s Santos Port, it argues that ALL didn’t give its cargo priority as agreed. ALL is suing to terminate the contract, saying Cosan hasn’t completed a terminal upgrade needed to avoid logjams upon the sugar’s arrival by train.

Curitiba, Brazil-based ALL said in a regulatory filing today that while it “constantly evaluates alternative solutions” to the dispute with Rumo, it’s not able to predict their result.

Cosan’s press office didn’t immediately reply to a request for comment when contacted by Bloomberg News.

To contact the reporter on this story: Julia Leite in New York at jleite3@bloomberg.net

To contact the editor responsible for this story: Brendan Walsh at bwalsh8@bloomberg.net

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