SAO PAULO () – Brazil’s BR Mall is open to discuss a potential merger or acquisition after smaller rival mall operator Aliansce Sonae rejected an offer on Friday, a source close to the talks said.
Shares of BR Malls rose 6.6 percent to 8.38 reais in evening trading, while shares of Aliansce Sonae rose 2 percent to 20 reais. Brazil’s Bovespa stock index rose about 1%.
Aliansce Sonae announced its proposal earlier in the day and confirmed the move, which has been expected since late December.
According to the securities application, BR Malls shareholders will receive 50% of the new company’s cash and 1.35 billion reais ($ 244.18 million) in cash, about 20 percent of BR Malls ’market capitalization.
The Aliansce said the merger would create “multiple growth opportunities,” but the BR Malls administration unanimously rejected the offer.
“Management understands that this offer underestimates the fair economic value of BR Malls and its asset portfolio and therefore the unsolicited offer does not serve the interests of BR Malls shareholders,” BR Malls said in a separate statement.
Still, he added, his board is “constantly evaluating strategic alternatives that could create value for the company and its shareholders.”
According to Refinitive Eikon, Aliansce Sonae has a market capitalization of 5.21 billion reais, compared to 6.85 billion reais for BR Malllar.
According to the source, BR Malls saw the offer as a purchase rather than a merger of peers. The company underestimated the offer and thought it should be higher than the market price, the source said.
Aliansce is backed by the Canadian Pension Plan Investment Board (CPPIB), and European shopping mall operator ECE and founder and chairman Renato Rike are the major shareholders, while BR Malls has wider ownership.
($ 1 = 5.5286 real)
Gabriel Araujo’s interview edited by Jason Neal, David Goodman and Cynthia Osterman