B2W Cia. Global do Varejo, a Brazilian online retailer, fell in Sao Paulo as a global equity rout overshadowed speculation it is a takeover target after losing half its value this year on concern rising competition will drive down profits.
B2W declined 2.1 percent to 15.52 reais at 4:15 p.m. New York time, after earlier advancing as much as 4.7 percent. Shares are down 50 percent this year.
Investors are also speculating that parent Lojas Americanas SA, Brazil’s biggest discount retailer, may use proceeds from a bond sale earlier this month to buy the remainder of the company it doesn’t already own, said Francisco Kops, an equity analyst at Planner Corretora De Valores in Sao Paulo. Lojas Americanas holds 58 percent of B2W, according to the online retailer’s website.
“There’s a rumor that because B2W’s price is so depressed compared to its history, it could be a target for a merger or acquisition,” Kops said in a phone interview. “There’s speculation B2W could be bought by a Chinese retail company, and also that Lojas will use cash from its bond sale for the remaining shares in the company.”
Lojas Americanas said its board approved the sale of as much as 500 million reais ($272 million) of local bonds, according to a regulatory filing on Sept. 12.
An official at an outside press agency representing Lojas Americanas and B2W, who asked not to be identified in accordance with company policy, requested an e-mailed list of questions when contacted by phone today. The official didn’t respond to the e-mail.
Kops has had a sell rating on B2W since June.