Centauro and Magazine Luiza in Bidding War for Brazilian Netshoes
By Richard Mann, Contributing Reporter
RIO DE JANEIRO, BRAZIL – Retailer group SBF, owner of the Centauro store chain, raised its proposal to buy Netshoes. In a market communication, the group advised that it has raised its offer to around US$108,7 (R$435) million, the equivalent to US$3.50 per share.
The new offer comes after Magazine Luiza has also announced an increase from its initial proposal to US$93 million, equivalent to US$3 per share.
Attempting to win the race against Magazine Luiza, Centauro stated that it also proposed to structure a transaction that would enable a transfer of up to R$70 million to Netshoes immediately after approval of the deal by the shareholders’ meeting and sign an association agreement through which Centauro “will make its products available on Netshoes’ online sales platform”.
At the end of April, Magazine Luiza had announced an agreement to obtain Netshoes for about US$62 million, or US$2 per share.
On May 23rd, the SBF group, owner of the Centauro chain, entered the bidding war with a proposal of US$ 87 million, or US$2.80 per share.
On May 26th, Magazine Luiza increased its initial offer by 50 percent, to US$93 million, the equivalent to US$3 per share, noting that the operation to buy all of Netshoes’ shares had already been examined by Brazil’s antitrust agency CADE, and on May 23rd, 2019 a decision was published that approved it without restrictions.
At the time, the company raised around US$ 140 million with the operation. In 2018, through the third quarter, the company had accumulated a net loss of R$241.5 million, compared to a negative R$120.6 million in the same period the previous year.
Netshoes is a Brazilian e-commerce sporting goods conglomerate. It was founded in February 2000 by Marcio Kumruian and Hagop Chabab. It went public on the New York Stock Exchange in 2017.
The group owns five distribution centers, three of which are in Brazil, in the cities of Barueri, Itapevi and Recife, one in Argentina and one in Mexico
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