UBS $76 Million Coke Bottler Trade Said Probed by MexicoJonathan Levin and Julia Leite
Mexican regulators are probing a $76 million trade UBS AG executed in Coca-Cola Femsa SAB shares hours before the bottler announced its biggest acquisition in 16 months, a person with direct knowledge of the matter said.
The Jan. 17 trade was the biggest in Mexico City-based Coca-Cola Femsa’s shares since August, equivalent to more than six times the stock’s average daily trading volume over the past year, according to data compiled by Bloomberg and the Mexican stock exchange. UBS, Switzerland’s largest bank, acted as the broker on the transaction, according to the exchange.
The trade took place at 8:30 a.m. local time, according to the data. After markets were closed for the day at about 9 p.m., Coca-Cola Femsa said in a regulatory filing it agreed to buy the Mexican drinkmaker Grupo Yoli SA in a deal valued at 8.81 billion pesos ($692 million). In trading the next day, Coca-Cola Femsa shares advanced 1.2 percent.
Mexico’s National Banking and Securities Commission is trying to uncover what motivated the transaction, according to the person, who asked not to be named because the investigation is still private. Neither Zurich-based UBS nor Coca-Cola Femsa has been accused of any wrongdoing, the person said.
“We don’t have knowledge of the investigation,” Carolina Alvear, a spokeswoman for Coca-Cola Femsa, said in an e-mailed response to questions. The Jan. 17 trade “is totally independent from the company.”
Aurelio Bueno, a press official for the securities commission, declined to comment.
Megan Stinson, a spokeswoman for UBS, declined to comment.
Luis Tellez, chief executive officer of the Mexican stock exchange, said in a Feb. 13 interview in New York that the bourse’s market surveillance unit identified the transaction as one that exceeded “certain parameters” warranting a referral to the commission.
“We have passed all the information we have” to the regulators, Tellez said.
UBS’s Mexican brokerage unit executed the transaction for 5.08 million shares, the biggest single trade in the bottler’s shares since Aug. 31, according to data compiled by Bloomberg. It’s not specified in the data whether the trade was executed for clients or on the bank’s behalf.
The shares changed hands at a price of 190.48 pesos each, a 4 percent discount to the previous day’s closing price, the data show. The total transaction value was about 967.6 million pesos ($76 million).
Coca-Cola Femsa shares rose 0.6 percent to 207.67 pesos in Mexico City today, bringing this year’s advance to 8.5 percent.
The Yoli acquisition announcement was Coca-Cola Femsa’s biggest since September 2011, according to data compiled by Bloomberg.