GP Investments to Buy Up to 63% of BTG-Backed BR Properties

  • Offer is 10 reais per common share of the real estate group
  • Private equity firm says goal is to influence BR's strategy

Private equity firm GP Investments Ltd. made an offer to acquire as much as 63 percent of BR Properties SA, the real estate developer backed by Grupo BTG Pactual.

GP offered 10 reais ($2.60) per share, and the transaction could push its total stake as high as 75 percent, according to a regulatory filing Friday. BR Properties shares jumped as much as 8 percent on the news, before closing up 4.6 percent at 8.65 reais.

BR Properties’s biggest shareholder is Grupo BTG Pactual, the Brazilian investment bank that’s been selling assets to stem a crisis since its then-chief executive was arrested last month. Andre Esteves, who is accused of trying to obstruct a corruption investigation, has denied wrongdoing through his lawyer. BTG shares climbed 14 percent.

BTG had a 35.9 percent stake, or 106.9 million shares, in Sao Paulo-based BR Properties as of Dec. 8, according to the company’s website. That would value BTG’s stake at 1.1 billion reais.

Hamilton, Bermuda-based GP also bought 12 percent of BR Properties Thursday, according to the filing.

The bid may test BTG’s urgency to sell its holdings. While the offer for BR Properties represents a 21 percent premium to its Thursday closing price, it’s still significantly less than where BR Properties was trading before the CEO’s Nov. 25 arrest. Like other BTG-backed companies, BR Properties has plummeted amid concern about the Brazilian investment bank’s ability to maintain liquidity. That includes pharmacy operator Brasil Pharma SA and as well as commercial bank Banco Pan SA.

The company sold its remaining stake in hospital business Rede D’Or Sao Luiz SA to Singapore sovereign-wealth fund GIC Pte.

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