Cetip Says $2.7 Billion Merger Offer From BM&FBovespa Not Fair

  • BM&FBovespa offered 39 reais for each Cetip share last month
  • Offer undervalues Cetip's business, company says in filing

Cetip SA, Brazil’s biggest fixed-income clearing house, said the 10.2 billion reais ($2.7 billion) offer made by BM&FBovespa SA undervalues its business.

The 39 reais per share offered by BM&FBovespa, the operator of Brazil’s equities and derivatives exchange, "doesn’t represent the fair price" Cetip sees for its business, the company said in a regulatory filing Thursday. Cetip sent a statement with its assessment to BM&FBovespa, according to the filing.

BM&FBovespa has sought to diversify its business in recent years by expanding into fixed-income assets as stock trading volumes slump, but the market for debt securities remains dominated by Cetip. At the time of the offer, analysts from Bradesco BBI and Credit Suisse Group AG said the operator of the Brazilian exchange might have to increase the price it was willing to pay in order to push the merger through.

Cetip shares closed at 37.50 reais on Thursday, compared to 38.20 reais on Nov. 13, the last trading day before BM&FBovespa disclosed its offer.

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