Chile's Ripley Surges Most Ever on Report Liverpool to Buy Stake

  • Investors bet an agreement could lead to public tender offer
  • Liverpool said to plan acquisition of 50% of Chilean retailer

Ripley Corp SA, Chile’s third-largest department-store operator, posted its biggest gain on record on speculation a Mexican retailer will buy a stake.

El Puerto de Liverpool SAB, Mexico’s biggest department store, will acquire 50 percent of the Chilean retailer, columnist Dario Celis wrote in a column Wednesday in Mexican newspaper Excelsior, without saying where he obtained the information. Liverpool’s board was informed last week and the value of the deal hasn’t been announced, Celis wrote.

The companies later said that they’ve held talks and that no agreement has been reached.

Shares of Ripley, which also operates banks and provides credit cards in the Andean region, surged 35 percent to 293.88 pesos on Wednesday in Santiago. The gain was propelled by speculation that a bid could involve a public tender offer to existing shareholders, according to Sebastian Hartmann, an analyst at Banco Penta who recommends investors buy Ripley shares.

"Our own analysis shows Ripley trading at a deep discount, so investors bet that an offer would be much higher," Hartmann said from Santiago. Ripley’s shares were down 31 percent in the 12 months through Tuesday, versus a 4.8 percent drop in the same period for the IPSA benchmark stock gauge.

Liverpool fell 3.2 percent to 217.09 pesos in Mexico City, trimming its gain over the past year to 39 percent. It only has operations in Mexico, while Ripley has businesses in Chile, Peru and Colombia.

Ripley is constantly in talks with global retailers, including Liverpool, to study potential business opportunities but hasn’t signed any agreements, CEO Lazaro Calderon said in a filing to the Santiago exchange.

"Ripley has been studying different options for its operations in Colombia and in other countries in the region for which it has been in talks with players in the Colombian and international market," Calderon said in the filing.

Liverpool and Ripley “have held discussions without agreeing to anything so far,” the Mexican retailer said in a statement to the Mexican stock exchange.

Ripley is controlled by the Calderon Volochinsky family with a 53% stake in the retailer, according to its most recent annual report.

In 2007, Ripley signed a deal with Grupo Palacio de Hierro SAB to create a joint venture to open stores in Mexico. Both companies announced the end of the partnership in 2010 after failing to open a single store.

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