Marfrig Shares Advance on Stake Sale Optimism: Sao Paulo Mover
Marfrig Alimentos SA (MRFG3), Brazil’s second-biggest food company, rallied on optimism that it is making progress on plans to sell assets and reduce debt.
Shares gained 4 percent to 10.46 reais at the close of trading in Sao Paulo for the biggest gain since Aug. 13 and the second-best performance on the benchmark Bovespa index, which slid 0.1 percent.
The Sao Paulo-based food company’s plan to sell a stake has attracted the interest of Blackstone Group LP (BX) and Tyson Foods Inc. (TSN), three people with direct knowledge of the talks said. Private equity units of JPMorgan Chase & Co. (JPM) and Banco Bradesco SA (BBDC4) are also interested in buying part of Marfrig or one of its units, the people said, asking not to be identified because the discussions are private.
“Marfrig is a well managed company with good products, the only thing that is stopping the stock from rising is debt,” Caue Pinheiro, an analyst at brokerage SLW Corretora, said by phone from Sao Paulo. “That’s why a plan to reduce its leverage is welcome.”
Marfrig, whose products include frozen dinners, chicken nuggets and hot dogs, is seeking to reduce debt after making 20 acquisitions in five years to compete with BRF - Brasil Foods SA. (BRFS3) In April, it concluded the sale of European and U.S. assets to Illinois-based Martin-Brower Co. for $400 million.
Marfrig declined to comment in an e-mailed response to questions. Peter Rose, a New York-based spokesman for private- equity firm Blackstone, declined to comment. Officials at Itau, Bradesco and JPMorgan’s Gavea Investimentos Ltda., who all asked not to be identified because of company policies, also declined to comment. Gary Mickelson, a spokesman at Tyson Foods, the biggest U.S. meat processor, declined to comment.
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