BM&FBOVESPASA – Bolsa de Valores Mercadorias e Futuros is seeking financing ofsome 2.5 billion Brazilian reais in order to complete its recently announced cash-and-stockmerger with ,O Estado de S. Paulo reported April 11,citing unnamed market sources following the deal talks.
The loan, which is expected to be obtained soon, is being negotiatedwith Banco Bradesco SA,Banco do Brasil SA, , and .
The transaction will be similar to a syndicated loan, with thedifference being, in this case, that each bank will negotiate its own terms, thereport said. There is also the possibility of foreign institutions participatingin the operation, as at least five banks are expected to be part of the financingstructure, the publication noted.
Separately, BM&FBOVESPA CEO Edemir Pinto said at a pressconference that the amount to be paid in cash could rise to 85% from 75% under aprovision in the deal agreement that aims to protect Cetip's shareholders from fluctuationsin BM&FBOVESPA's stock price, Reuters reported the same day.
Under the terms of the deal, which was announced April 8, Cetipshareholders will receive 30.75 reais in cash and 0.8991 of a BM&FBOVESPA sharefor each Cetip share held. Following the transaction, Cetip shareholders will endup owning about 11.8% of BM&FBOVESPA's equity capital.
Earlier in the month, BM&FBOVESPA reportedly approximately $1.3 billion throughthe sale of its entire 4% stake in CMEGroup Inc.
The BM&FBOVESPA-Cetip merger will generate synergies thatare estimated between 90 million and 100 million reais by the end of a three-yearperiod of combined operations, O Estado de S. Paulo reported. "We expect synergiesof at least 10% for combined expenses," Pinto reportedly said.
Meanwhile, Moody's said on the same day that BM&FBOVESPA'smerger with Cetip is credit positive, as well as its purchase of a 4.1% stake inMexico's stock exchange Bolsa Mexicana de Valores SAB de CV. "The transactions are credit positive forBM&FBovespa because they will enhance its revenue diversification and allowit to extend its dominance in Brazil and its reach across Latin America followinga similar acquisition in Chile in 2015," the rating agency said in a report,adding that it will further enhance BM&FBOVESPA's position as the sole operatorin Brazil's clearing and exchange markets "at a time of declining trading volumesamid a sharp economic recession."
However, HSBC Securities analyst Carlos Gómez-López expects toughregulatory examination of the deal because it eliminates competition for BM&FBOVESPAin equity trading and derivatives, Reuters reported.
In addition, Americas Trading System Brasil, which is BM&FBOVESPA'srival in the equity market, will ask antitrust regulator Cade to investigate whetherthe deal breaches competition rules.
BM&FBOVESPA and Cetip executives, however, anticipate thatBrazilian regulators and shareholders will approve the deal in due time, accordingto Reuters.
As of April 11, US$1 wasequivalent to 3.53 Brazilian reais.