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Brazil's Banco BMG prices 1.6B reais IPO at bottom of range

Banco BMG SA on Oct. 24 priced its initial public offering of preferred shares at 11.60 Brazilian reais apiece, valuing the IPO at roughly 1.6 billion Brazilian reais.

The São Paulo-based company said it plans to sell about 103.5 million preferred shares in the offering, resulting in a capital increase of about 1.2 billion reais, while a selling shareholder will sell another 16.5 million shares.

The pricing represents the bottom of the company's indicative price range of 11.60 reais to 13.40 reais, even as investor demand reportedly reached 4x the offering's size.

The pricing was based on an investment intent collection procedure, or book-building, led by local and foreign professional investors, BMG noted.

The bank's board was cleared to issue the final offering memorandum and was expected to close the transaction on Oct. 25.

This is the bank's second attempt to go public, after it shelved an IPO scheduled for December 2018 when demand fell short of expectations. Since then, BMG had been exploring different alternatives to raise funds.

As of Oct. 24, US$1 was equivalent to 4.01 Brazilian reais.