On offer are 26.7m secondary shares in a SKr46–SKr57 price range. A further 3.8m shares make up the greenshoe. Bookbuilding runs until June 1, with trading due to commence the next day.

Leads report very strongly positive feedback from premarketing, which gave confidence to launch the bookbuild despite continuing volatility. The discount retailer has an aggressive expansion plan, but it is self-financing and has shown a top-line CAGR of 21% through the expansion of the last five years. As the company generates a lot of cash investors can still look forward to a dividend of 50% of net profit, which corresponds to a yield of 3.6% at the bottom of guidance.

ABG Sundal Collier and Carnegie are joint bookrunners.

If the deal gets done, these investors and bankers say, it will come below range R$10.75–$13.75 range it is currently talked. The company is selling 55.8m shares in the all-primary offering. Bradesco, Credit Suisse, BTG Pactual, Banco do Brasil are the bookrunners with Votorantim, Espirito Santo Investments and HSBC coming as co-managers.

Despite being privately held, Julio Simoes is a very well-known name in Brazil as it is one of the largest road logistics operators in the country. So, bankers believe, the leads may enlist the support of local investors, maybe even with strategic interests.

One banker dismissed such talk saying that while local management has toyed with the ideas for years, the US parent does not like it.

An investor who had heard the rumor was also skeptical.

“I think it is difficult because they have very weak margins from what little we know,” he said.

However, local management could be using the success of the Santander IPO to renew talk of a Brazilian listing.

More realistic is a listing of Belcorp, the third-largest player in the door-to-door cosmetics market. LatAm bankers have been pitching the Peruvian concern on the merits of life in the public spotlight.

Belcorp management see little need, however, to share ownership in a business that is doing so well.

Instead, JBS intends to meet its funding objectives from the sale of 200m shares in the follow-on offering, with pricing scheduled for April 26. BTG Pactual, BB Investimentos, Bradesco BBI, JP Morgan and Santander plan to officially open the books on April 14. Votorantim, Deutsche Bank and Safra are co-managers on the transaction.

The raise is smaller than originally expected. Last July, JBS filed a prospectus with US regulators that sought to raise US$2bn by carving out its US operations in an IPO. The company partially monetised its investment through the sale of a US$1.3bn CB in January that is convertible into shares of the US unit. If JBS USA does not list the security pays a 10% coupon, far higher than its standalone cost of debt funding.

The company is selling 37m shares in the primary portion of the deal and the controlling shareholders, the Nacht family and fund Peninsula, are selling 14.8m of their shares at a suggested range of R$11.5-R$14.5 each.

That range sets book-value-per share at about R$1.38, a seemingly steep valuation. It would not be surprise to see the deal price below-range, given recent investor pushback to small-cap companies such as Mills.

Joint bookrunners Itau BBA, BTG Pactual, Goldman Sachs and UBS, however, are likely to shift investor focus to the fact that Mills provides services to constructors, which have benefited from a boom both in infrastructure and home building.

Separately, Brazilian toll road operator Ecorodovias scored a pyrrhic victory in an IPO that could raise as much as R$1.37bn (US$764.2m), including a 15% over-allotment option. The offering came slightly above the bottom of the suggested range, though that was considered a favourable outcome in a year where virtually all Brazilian IPO have priced below range.

Ecorodovias sold 92m shares in a primary offering and 52m in a secondary that priced at R$9.5, the bottom half of a R$9-R$12 range. Itau BBA, BTG Pactual and Credit Suisse were the joint bookrunners, with Morgan Stanley and Goldman Sachs coming in as co- managers.
Investors pointed to a solid business that generates consistent cash flow as motivating factor to participate. The company is one of the few compelling alternatives in the IPO pipeline, suggested one investor that participated.

Meanwhile, Hypermarcas seems to be attracting interest in its follow-on offering. Shares of the consumer products concern are trading at R$21.60, a 3.6% decline and versus a pre-launch level of R$22.40 pre-launch level. The performance is notable in that there are no rules in Brazil prohibiting investors from shorting stock and covering on a deal, as the case in the US. Citigroup and Credit Suisse are leading the deal.

This morning the leads on Volkswagen’s pre-placed rights issue have said the book will close at 4pm London time, a day ahead of schedule, and pricing will come at €64-€65. The preference shares were trading at €72.95 before the issue of 65m new prefs was announced, but pricing is still going to be above the trading level two weeks earlier. Total proceeds will be €4.16bn-€4.225bn, well above the €4bn needed.

BofA Merrill, Citigroup, Deutsche Bank, HSBC and JP Morgan are bookrunners.

Also this morning price guidance of €48-€52 has been given for the Brenntag IPO. The German chemicals company saw its book covered late on Friday and with two days of bookbuilding remaining sensitivity has moved off the bottom of the original €46-€56 range. At the bottom of tightened guidance the deal will raise €624m.

Encouragingly the deal has attracted good demand from across Europe and the US, while the five key German accounts are in and domestic support is higher than that seen on Kabel Deutschland’s float last week. Deutsche, Goldman, BofA Merrill and JP Morgan lead on Brenntag. Pricing will come over the weekend.

Completing the hat trick of positive German news, the IPO of fashion brand Tom Tailor priced overnight at €13, bang in the middle of the €11-€15 guidance, to raise €143m. Commerzbank and JP Morgan were joint books.

Santander, lead coordinator, joint-bookrunner Bank of America Merrill Lynch marketed 25.7m units at R$19–$25, an intentionally wide range designed to accommodate varying views on valuation. BB Investimentos, Banco Votorantim and Espirito Santo Investments were on the second line of the prospectus.

However, investors that viewed the company as essentially a cash-box investment vehicle pushed back on valuation, with many pulling bids at the last minute amid concerns over the performance of recent IPOs. The company operates a few small hydroelectric plants but has very few assets overall.

The company, which gained attention in December when it became the largest seller of wind-generated power to the government, is shifting its focus to a private placement. The financing is expected to target a valuation toward the bottom end of the proposed IPO pricing.

Such an outcome would vindicate Itau BBA, which was mandated on the IPO but pulled out over a dispute on the valuation. No fee, just reputation.

Batista, who previously had little trouble attracting interest in similar “cash-box” investment vehicles such as OGX, an exploration & production company and OSX’s primary client, pledged to invest up to an additional US$1bn, with a three-year lock up. The size of the commitment is unclear.

What is clear is the surprising turn in investor sentiment or, alternatively, overly optimistic valuation pitched by investment banks. Credit Suisse, Bradesco BBI, BTG Pactual, Itau BBA and Morgan Stanley were joint bookrunners; Barclays Capital, HSBC and Banco Votorantim came in on the second tier.

Investor sensitivity was evident as pricing was delayed by two days on a significantly restructured deal. The concern stemmed from sizable discount on OSX’s sizable US$4bn backlog, almost all which is sourced from OGX. In its original form, IPO had the potential to reach US$5.5bn, which would have made it the largest deal in world this year.

The deal is expected to price on March 31 following a global roadshow. Concurrent with the IPO, Warburg Pincus has agreed to purchase 17.2m shares and warrants to purchase 4.3m shares. Warburg Pincus initial investment is capped at the lower of either 23.9% of common stock or US$230m.

Citigroup will retain between 32% and 46% of Primerica equity post-IPO. Assuming a fully-exercised greenshoe, Citigroup stands to collect up to US$500m in proceeds from the carve-out IPO and concurrent private placement.

Meanwhile, the lock-up period on the US Treasury Department’s US$25bn TARP investment in Citigroup expired on Tuesday and preferred shares have converted into 7.7bn common shares. The cost of this 27% equity stake is US$3.25 per share. The Treasury Department has not indicated how or when it will dispose of its Citigroup equity.