Colbun Rallies After Saying It Won't Bid for Colombia's Isagenby
Colbun withdraws, citing a tight schedule and higher price
Leaves Brookfield as sole qualified bidder for Jan. 13 auction
Colbun advanced 3.2 percent to 162.5 pesos at 1:04 p.m. in Santiago, the most since Aug. 27 on a closing basis. The IPSA benchmark index advanced 0.2 percent. Before Monday, the stock had fallen 14 percent since May 11, when Colombia’s government said Colbun was among three companies that could bid for the state’s 58 percent stake in the power generator.
Colbun told Chile’s securities regulator in a filing released Monday that it wouldn’t present a bid because of tight deadlines and after the government boosted the price for Isagen. The auction is set for Jan. 13. and the winner will have to pay the government for the stake 10 days later, according to a report from Credicorp Capital on Monday. The acquirer is required to offer to buy the rest of the shares within two months, Credicorp said.
The Colombian government raised the minimum price for its stake to 4,130 pesos per share and plans to use the proceeds to cut transport costs by building new highways to link the nation’s key industrial centers and ports, Finance Minister Mauricio Cardenas said Wednesday in an interview. Colbun’s withdrawal leaves Brookfield Asset Management Inc. as the sole pre-qualified bidder.
"The news is positive for Colbun given the high multiple implied by the minimum price set by the Colombian government," Credicorp analysts Frederic Cartallier and Carolina Ratto said in the report.