PBR, Petrobras: Largest Global Share Offer Ever

Petrobras, PBR (click for alerts) on the NYSE, reported in the preliminary prospectus of the global offer of shares that the total distribution can reach R$ 126.7B, or USD $73B, considering the exercise of the maximum amounts of shares and excluding the deduction of commissions and expenses, based on the prices as of September 1.

At that time, the price per common share at BMF & BOVESPA was R$ 31.25 and preferred to R$ 27.03 in addition to price U.S.$ 35.07 per ADS representing ON and U.S $ 31.12 /PN in the NYSE.

Note that we track all Latin American ADRs live here, PBR included.

This would be the largest stock offering in history, surpassing Nippon Telegraph and Telephone, which raised $ 36.8B. Another major recent stock offering was the first conducted by the Agricultural Bank of China, which raised $ 22.1 billion.

Without the extra lots, the offer would be R$ 110.3B (USD $63.6B)

Petrobras does not distinguish how much the additional supplementary and contains lots of common or preferred shares. The government left open the class of papers, saying that the offer may be increased by up to 10% of the original amount in additional lot and up to 5% in additional common shares and/or preferred shares.

In the case of additional receipts are included in the pool, in the form of ADS (American Depositary Shares), each ADS represents two ON or PN, as appropriate.

This setting will occur after completion of the procedure for collection of intended investments, called bookbuilding, which closes on September 23.

At the closing price yesterday, and following any exercise in full of extras lots in the same proportion of shares placed in the bid, which has 1.37 more preferred shares that, the offer would reach a gross of R$128 billion.

The additional lot may be exercised by the coordinating banks if the price of papers on the market price exceeds the supply. Also in this case, the coordinator of the offer may exercise activities to stabilize prices by buying and selling shares in the market. Morgan Stanley can do to stabilize the stock price within 30 days from the date of the notice of commencement of the offer, scheduled for September 24.

The mechanism is also provided for the price of the common and preferred shares in the form of ADS, in the international offering. Any profits from the activity of stabilization will be shared between the coordinators and Petrobras, the proportion of 60% / 40%, respectively. Any losses will be absorbed solely by the coordinators.

With data from O Estado de Sao Paulo.