Estacio Participacoes SA (ESTC3), Brazil’s third-biggest education company by market value, rose the most in a month as the country’s Education Ministry canceled operating licenses for two competitors in Rio de Janeiro state.
The ministry cited poor quality as it canceled licenses for the for-profit Universidade Gama Filho and Centro Universitario da Cidade, both units of closely held Galileo Educacional, according to the official gazette today. The colleges have a combined 35,000 students who will have to transfer to other institutions, William Castro Alves, an analyst at brokerage firm XP Investimentos, wrote in a note to clients today.
“The decision is very beneficial for Estacio,” which is well-positioned to pick up the transfers because it already has half of its more than 300,000 students in the state of Rio, Alves wrote.
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