Indupa Jumps as Parent Solvay Plans Argentina Exit

Solvay Indupa SA, an Argentine petrochemicals maker, had its biggest gain in 10 months after Belgian parent Solvay SA tagged the unit for sale, raising the prospect of a deal that could benefit minority shareholders.

Indupa surged 10 percent to 1.93 pesos at the close in Buenos Aires. It was the biggest increase since April, leaving the stock up 33 percent over the past four days.

Brussels-based Solvay put Buenos Aires-based Indupa in its “held for sale” accounting category at the end of last year, Solvay Chief Executive Officer Jean-Pierre Clamadieu said yesterday on a conference call. “You all know that the political and economical situation in Argentina is quite complex and probably not ideal to develop a business,” he said.

Indupa’s shares trade below the value of its assets as recorded on the books, and investors are speculating that any bids will use book value as a reference, Juan Jose Vasquez, an analyst at Buenos Aires-broker Bull Market Brokers, said in a telephone interview.

One risk for speculators is that Indupa’s bylaws don’t require bidders to extend offers to minority holders, Vasquez said.

The unit has been unprofitable since the second half of 2011. It operates plants in Bahia Blanca, Argentina, and Santo Andre, Brazil, which produce PVC plastic and caustic soda.