Brazilian equity sales have slowed so much that Louis Dreyfus Holding BV, the world’s second- largest sugar-cane processor, is dangling a money-back guarantee to investors who buy shares in its initial public offering.
Biosev SA (BSEV3), Dreyfus Holding’s Sao Paulo-based unit, unveiled the deal sweetener to spur demand eight months after its first attempt to raise $579 million failed. Just three Brazilian companies did IPOs in 2012, the fewest in nine years, with two of those pricing shares below their target. Mexico had six in the same period, the first time since 2003 that Brazil didn’t lead Latin America in IPOs.
The money-back guarantee is unprecedented in Brazil, according to the stock market regulator. David Menlow, president of Green Brook, New Jersey-based IPOFinancial.com, said he’s never seen a deal like this in his 24 years analyzing initial public offerings across global markets. Biosev is seeking to tap a stock market that is the fifth-worst performer in the world this year, dragged down by government intervention in industries including utilities, oil and banking.
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