UPDATE 1-Shares in Bradespar soar with distribution of about $1 bln in Vale stock
(Adds analyst note, share reaction)
By Paula Laier and Tatiana Bautzer
SAO PAULO, Sept 15 (Reuters) – Shares in Brazilian holding company Bradespar, one of the largest shareholders in miner Vale SA, spiked after the company announced the distribution of almost $1 billion in Vale shares.
Preferred shares were rising almost 7% in early morning trading, at 64.71 reais, after Bradespar announced it will reduce its capital with the distribution of 5.2 billion reais ($990 million) in Vale shares to its shareholders.
The proposal will be voted on at an Oct. 15 shareholders meeting. Bradespar owns a 5.73% stake in Vale, worth 27.6 billion reais based on Tuesday’s closing prices, and after the transaction will reduce its stake to 3.23%.
The distribution will only occur after the release of third-quarter earnings, Bradespar said. The company also announced a share split aimed at increasing trading liquidity.
XP analysts said in a note to clients the news is positive for the holding company, reducing its discount relative to Vale shares from 20%. Analysts at Banco Safra say the share distribution is positive, since Vale shares will be given to shareholders at their book value, which is lower than the price they are traded.
Bradespar has a current 23% discount relative to Vale shares, Safra analysts said.
($1 = 5.2533 reais) (Reporting by Paula Laier and Tatiana Bautzer Editing by Paul Simao and Nick Zieminski)