Anhanguera Erases Monthly Loss as Kroton Confirms Deal Terms

Education company Anhanguera Educacional Participacoes SA (AEDU3) erased a monthly decline after denying a report that the terms of its merger with Kroton Educacional SA (KROT3) are being reviewed.

Anhanguera jumped 3.4 percent to 12.98 reais at 1:47 p.m. in Sao Paulo. The shares are up 2.3 percent in February, the first monthly gain since November. They dropped for the first time in three sessions yesterday after Exame magazine said Kroton was unhappy with the terms agreed in April because Anhanguera has underperformed since the deal was announced.

“There’s nothing in the merger agreement saying that the swap ratio could be adjusted because of changes in stock prices,” Anhanguera and Kroton said in a joint statement today.

Kroton offered to buy Anhanguera in April in an all-stock deal that would create the world’s largest education company by market value. Under the terms agreed then, each Anhanguera share will be traded for 0.4548 Kroton share once the deal is concluded. The merger still needs to be approved by Brazil’s antitrust regulator known as Cade.

“Anhanguera benefits more from this merger,” Beatriz Nantes, an analyst at the equity research firm Empiricus in Sao Paulo, said by phone.

Anhanguera has dropped 11 percent since Dec. 4, when Cade’s superintendent said that the proposed combination “generates high concentration” in some markets, and “if approved with no restrictions, could cause harm to students in some courses.” Kroton has jumped 16 percent in the span.

To contact the reporters on this story: Ney Hayashi in Sao Paulo at; Julia Leite in New York at

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

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