U.S. Markets close in 2 hrs 52 mins

BNDES Plans to Sell $1.9 Billion of Shares in World’s Biggest Meat Supplier JBS

Vinícius Andrade, Felipe Marques and Tatiana Freitas

(Bloomberg) -- Brazilian state development bank BNDES will likely sell part of its stake in meat company JBS SA in January, people familiar with the matter said.

The January date would give BNDES and banks coordinating the public offering more time to work out red tape, said one of the people, who asked not to be identified because talks are private. While BNDES hadn’t committed to a schedule, local media reported the sale could take place this year. BNDES declined to comment.

BNDESPar, the development bank’s investment arm, holds a 21.3% interest in JBS, the world’s biggest meat supplier, and plans to sell a stake totaling about 8 billion reais ($1.9 billion). Banco Bradesco BBI, Banco BTG Pactual, Bank of America Corp., Banco Itau BBA and UBS Brasil Corretora have been hired as legal and financial advisers.

JBS shares have surged 147% this year, fueled by pork-supply disruptions in China that pushed up global protein prices. The gains have lifted the value of BNDES’s stake in JBS to 16.5 billion reais from about 5 billion reais a year ago. Still, the prospect of the development bank’s offering has tapped the brakes on the rally, with the stock down about 14% from a record high in September.

The divestment is part of President Jair Bolsonaro’s plan to shrink the size of the state. The development bank, the biggest JBS shareholder after the Batista family, which founded the company, played a crucial role in the meat producer’s expansion overseas.

(Updates with BNDES comment in the 3rd paragraph.)

To contact the reporters on this story: Vinícius Andrade in São Paulo at vandrade3@bloomberg.net;Felipe Marques in Sao Paulo at fmarques10@bloomberg.net;Tatiana Freitas in São Paulo at tfreitas4@bloomberg.net

To contact the editors responsible for this story: Brad Olesen at bolesen3@bloomberg.net, James Attwood, Julia Leite

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.