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Grupo SBF raises bid for Netshoes in takeover battle with Magazine Luiza

Brazilian retailer Grupo SBF SA on May 28 raised its bid to acquire Netshoes (Cayman) Ltd. after Magazine Luiza SA, which first offered to buy the online retailer of shoes and athletic wear, lifted its per-share price offer to $3.

SBF, which operates sports retailer Centauro, said it is now offering to acquire Netshoes for $3.50 per share in cash, up from its initial bid of $2.80 per share, bringing its estimated total offer price to approximately $108.7 million.

In a separate announcement, Netshoes confirmed that it received SBF's revised proposal, saying it will review the offer "to determine the course of action that it believes is in the best interest of the Netshoes' shareholders."

Netshoes entered into a plan of merger with Magazine Luiza on April 29. After SBF's unsolicited offer, Magazine Luiza amended its bid May 26, offering to take over Netshoes in a deal with an estimated value of approximately $93 million.

"Pending the completion of such review, the Netshoes board has not made any determination as to whether Centauro's revised proposal constitutes a superior proposal under the terms of the merger agreement," the Brazilian e-commerce company said in its release.

Netshoes added that its board reaffirms its existing recommendation of the transaction with Magazine Luiza without qualification.

Meanwhile, as part of its revised proposal, SBF said it will transfer up to 70 million Brazilian reais in cash to Netshoes, immediately following the anticipated approval of the transaction at Netshoes' shareholders meeting.

Netshoes said it postponed its shareholders' meeting scheduled May 30 following the receipt of SBF's upsized offer. "Netshoes and Magazine Luiza expect to agree on a new date for the shareholders meeting in the coming days," the company said.

If Netshoes accepts SBF's offer, Centauro will market its products through Netshoes' digital platform upon closing of the transaction.

Netshoes' stock jumped as much as 8.83% to $3.08 in New York trading on May 28 following the latest development. In Brazil, shares of SBF closed up 2.86% to 11.52 reais, while shares of Magazine Luiza also closed up 5.92% to 188.53 reais after SBF's revised offer.

As of May 27, US$1 was equivalent to 4.02 Brazilian reais.