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Abril Rises to Four-Week High on Laureate Merger Speculation

Jan. 8 (Bloomberg) -- Abril Educacao SA rose to a four-week high in Sao Paulo on speculation it may merge with the largest U.S. operator of for-profit colleges.

Shares of Abril, the education unit of Brazil’s Grupo Abril, gained 2.7 percent to 33.59 reais at the close of trading, the highest since Dec. 12. Trading volume was 4.1 times the full-day average of the past three months.

Abril is in “advanced” discussions for a 2 billion-real ($840 million) merger with Laureate Education Inc., O Estado de S. Paulo columnist Sonia Racy wrote today, without saying where she got the information. Abril said in a regulatory filing that it isn’t in talks for a total or partial association with the Baltimore-based company. Chief Executive Officer Manoel Amorim also denied any negotiations in an interview in Sao Paulo.

“There is absolutely nothing happening,” Amorim said. “There is no basis to this.”

Closely held Laureate declined to comment through a press officer from FSB Comunicacoes when contacted by Bloomberg News.

“The advance is due the speculation,” Fernando Goes, an analyst at Clear Corretora in Sao Paulo, said in a telephone interview. “I think it’s more short term, but people are looking at it.”

Kroton Educacional SA, Brazil’s largest operator of for-profit colleges, is planning to buy Anhanguera Educacional SA for 5 billion reais in an all-stock transaction that would create the world’s biggest education company. Brazil’s antitrust regulator is reviewing that proposal.

Laureate, which was spawned from tutoring chain Sylvan Learning Systems Inc. in 2004, owns 75 schools in 30 countries. It has 800,000 students, up from 243,000 seven years ago, making it America’s largest for-profit college company by enrollment. Since going private in 2007, Laureate’s annual revenue has more than tripled to $4 billion.

To contact the reporters on this story: Julia Leite in New York at jleite3@bloomberg.net; Christiana Sciaudone in Sao Paulo at csciaudone@bloomberg.net

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

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